Saturday, September 7, 2013

Friday 9/6/13 Market Update

There is no change to the wave count since the last update due to the structure of the downward 8/5-8/30 action and the lack of bearish possibilities in the short-term.  The wave count in the chart above works well with recent action and is by far the best option given the limited possibilities.

The sell-off since the last all-time high is looking more and more corrective as prices continue to push higher this week.  This does not rule out the possibility that a double zigzag lower since the last all-time high is still underway however.

Mainly because the entire rally this week looks non-impulsive and not like an ending diagonal underway, an unfolding upward flat over the last few weeks seems like a poor option.  A triangle is a better option (alternate'', the best alternate count) but as it stands now, the [c] wave is bizarre.  One more push higher will make a double zigzag [c] look considerably better, but by then the 8/26 high may be taken out, invalidating the pattern.

Besides it being a rare pattern, a triple zigzag lower in August seems unlikely because the rally this week has already dominated Y and is already larger in size than X.  As expressed in the triangle option above, the rally this week looks incomplete as a corrective wave.

Wave [4] looks small in relation to [2] so [4] looks incomplete.  Since the shorter term waves make a good argument for a complete double zigzag lower, [4] should be a flat or triangle wave with (B) underway.  It would not surprise me if [4] is complete in this well-established uptrend however.

The very long-term wave count remains unchanged and is still available here.

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