Saturday, August 31, 2013

Friday 8/30/13 Market Update

There is no change to the wave counts since the last update.  The Wednesday-Thursday bounce had a corrective look when it was unfolding thanks to the steep correction starting the middle of the day on Wednesday and the short-lived burst Thursday that was unable to maintain momentum and stopped at Tuesday's resistance.  The more developed the Thursday and Friday sell-off  became, the more the Tuesday-Wednesday bounce did indeed look like a zigzag correction.

Although it was still not a great option at the time, while a truncated impulse lower seemed possible on this scale at around 1pm EST on Friday, it seems like a very poor option now due to the additional intraday low reached Friday at the end of the day.

Even if a correction lower is unfolding since the last all-time high, it is, at least in my mind, very likely that the down move is not yet finished.  The short term waves over the last few days look very bearish and no wave pattern on the intermediate-term chart above looks complete.

In the long-term, it seems possible that the market will eventually turn higher to reach new all-time highs.  Momentum is clearly waning however so any upside should be modest.  So there is a warning to the bulls since the very mature upward move since 2009 has a 3-wave feel to it and the market is losing steam.

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