Friday, March 29, 2013

Thursday 3/28/13 Market Update

There is essentially no change to the wave count since the last update as the short term action still suggests corrective action higher.

There are many ways to describe the upward action since the 3/19 low. An option second to the first chart is presented above.  Although [b] is only a single zigzag in this count which is an improvement, its (b) wave correction is extremely complex which is unusual.

The point of showing this count is to show a structure that is applicable if the alternate' count is correct (wave 2 complete as a double zigzag on 3/19).  If the alternate' count is correct, there is a solid 1st wave impulse higher 3/19-20 followed by a heavy 2nd wave correction breaking under the 61.8% retracement level several times.  The complexity of the 2nd wave, the large retracement of the 1st wave, and the sideways nature of the 2nd wave are all working against the bullish alternate' count.  Generally it seems odd that there is such heaviness to the action the last few weeks if a "3rd of a 3rd" wave is actually underway.

If the alternate' count is correct, 3 should carry strongly to 1625 or higher as 3rd of 3rd waves are usually powerful and longer than their 1st wave counterparts.  But there is clear momentum loss higher in an extended rally that has lasted for several months.

Really the only thing bullish in the short term is the break into new recovery high territory on Friday, but the last two days of rally action also looks over-extended.  But keep in mind that the corrective action into new recovery highs this week is clearly bullish in the intermediate term.

In the long term, an impulse since [B] still appears to be underway.  The rise into new recovery highs that occurred this week was expected and suggests something more than an impulse since (C) of [B] underway.

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