Tuesday, April 2, 2013

Tuesday 4/2/13 Market Update

Due to the rally today, the count has changed since the last update.  An impulse wave may be complete since [B].  This is a good count, however counts calling for major reversals in the midst of an established trend must always be considered with some doubt.  The alternate count is essentially the same as the last primary count but where [b] of 2 of (3) is underway but as a triple zigzag.

The choppiness higher over the past few weeks is a clear indication that corrective waves are unfolding.  A breakout above the mess for a core of an impulse wave would clear the corrective characteristic, but the retracements of the numerous impulse waves higher are quite deep which is not typical for second waves.

Because there are now 5 legs higher in the rally since 3/19, a double zigzag is now a low probability.  Something more complex is much more likely like a triple zigzag or ending diagonal.  The ending diagonal is the best option on this scale because it is more common than a triple zigzag.  There is also a count for an impulse wave higher since [B] with good features: (1) has its first wave extended and (3) has its 3rd wave extended with the subdivided "look" and core that is typical for a third wave.  The main problems are the small size of (4) and (3) being shorter than (1).  These are not small problems to be sure, but the magnitude of the rally since November in the current technical condition (a very overextended one) make the case for a "3rd of a 3rd" wave not yet started a bit weak.

With overthrow of the upper ending diagonal line, there was already a wave looking like a 3-wave pattern higher since 4 followed by what appears to be an impulse down.  Another impulse or zigzag higher since the trading low today is possible, but prices must stay under 1580 so the pattern is not invalidated.

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