Wednesday, May 8, 2013

Wednesday 5/8/13 Market Update

There is no change to the primary count since the last update.  Following a brief correction Friday, an impulse appears to be complete.  The deep sell-off mid-day today suggests 4th and 5th waves are underway winding down the move.

A small, shallow corrective area divides the wave higher that began at the April low.  If this rally is an impulse wave, the corrective area must contain one or two second waves.  One is preferred because of simplicity, but wave (c) of [x] counts much better as an impulse than a zigzag.  This scenario favors two which breaks a retracement guideline and makes the count more complex.

Also a problem with the impulse count is the [y] wave; its structure looks much more like two impulse waves than one.  If the core of the impulse since the April low has not yet been seen, this problem would be cleared however.  This outcome seems difficult to imagine however.

Even if an impulse wave since the April low is underway, it makes little sense in the longer term; (3) looks like a very complete, well formed impulse whereas the alternate count is creating a much more disproportionate picture.  The primary count remains a strong option.

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