Saturday, August 24, 2013

Friday 8/23/13 Market Update

There are some changes to the short-term count since the last update.  On the scale above, the wave action looks like an upward corrective wave due to the wave action since the 20th.  This is due to the 3-wave low and the zigzag-looking rally underway.

Considering the size of 1 and 3, the prospect of a complete wave 5 looks a bit strange.  This is because of the 3-wave decline on the 20th-21st which cannot be an impulse and the small wave (relative to 1 and 3) following that on the 21st which did not make a new low.  Additionally, the rebound on the 21st looks more like 3 waves making an upward flat the 20th-21st less likely.

Regardless of these concerns, the alternate'' wave count looks like the strongest alternate count.  It suggests additional downward action where the low last week will be taken out soon as an impulse lower since the last recover high has completed.

New all-time highs are possible if wave (4) is incomplete or the alternate count is correct.  Both of these suggest lower prices before a rally however.  Additional downside of course works well with the wave structure in the shorter term.

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