Wednesday, February 5, 2014

Wednesday 2/5/14 Market Update

The primary wave count has been changed to an alternate wave count from the last update.  The reason is that the waves lower since 1/15/14 now look considerably more corrective than impulsive.

If an impulse lower has unfolded or is unfolding, there are a number of broken guidelines within this wave.  For example alternate' above has a small, momentum losing core "3rd of a 3rd" wave and a very large but shallow, sideways wave [ii].  If an impulse down is complete since 1/15/14, there are serious proportionality problems with its corrective waves.  On the other hand a double zigzag down as described above has no problems whatsoever.

The rally ensuing from today's low looks like more than 5 waves for an impulse.  This suggests a sideways correction since the Monday low is incomplete or the market is drawing out a larger upward impulse that began today.  Because of proportionality, a sideways correction underway for several more days, as that option seems to call for, does not work well with the primary wave count.  The Tuesday-Wednesday drop surprisingly works best as an impulse wave lower, not a zigzag pattern.  Therefore it is most likely that [4] is complete to the downside.

Note: Friday an hour before the open is the monthly jobs report.  I would expect a positive reaction from this as the market seems poised to have some large up-days in the very near future.

blog comments powered by Disqus