Wednesday, October 9, 2013

Wednesday 10/9/13 Market Update

Since the last update, the alternate' wave count became a much weaker option given the now large retracement of the 8/30-9/19 wave higher.  As the primary count or new alternate' count suggests, an unfolding large sideways correction since 8/2 works well in relation to [2].

As discussed many times in the past, the action lower since 9/19 looks very corrective.  In the last update, it was stated that even with this being the case, the move lower looked incomplete.  Even though there was some change to the short-term wave count, prices did move lower as anticipated.

A bounce has ensued following an impulse wave down.  The bounce looks small in relation to [b] of W at this point, so some additional corrective action is expected.  It is very difficult to view the move lower since 9/19 as a complete wave of any kind, so the bounce underway should be a corrective wave. On a more positive note, the alternate' 2 count calling for a complete wave [5] is now a lesser option; it is hard to see a good impulsive option lower since 9/19.  This is due in large part to the action on Monday in the context of the waves surrounding it.  The expectation is for the market to finish painting a clear double zigzag lower in the coming days, even if the triangle primary count is invalidated with a quick dip under the August low.

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