Wednesday, May 21, 2014

The Market Holds Ground, but for How Long?

The following analysis was given in the last update: "over the last two years, an impulse higher developing since [4], (2), or (4) is a weak option.  A sideways correction beginning at (1) or an ending diagonal higher since (4), B, or (2) are far better options."  These long-term options remain the same today.  A more detailed explanation of why is available in the first few paragraphs here.
There is also no change to the options since the 2009 low.  A zigzag or impulse higher are the best possibilities since that time.

A sideways wave since (3) is possible and obviously suggests a test of the wave (4) April low.  It can work with a sideways correction underway since (1) or an impulse wave since [4] or later.  The complexity this option adds makes it not the most desirable of options however.
The sideways options after A have actually weakened because of the additional wave action over the last three days that needs to be worked into the possibilities.  For instance if there is a flat from [b] to 1, that wave must be part of some other larger corrective wave to explain the waves around it.  Wave [b] can be zigzag wave 'w', but the action higher since 1 then does not make sense as part of wave 'y'.  Maybe A to 1 is a zigzag+flat double, but [a] only works as a single zigzag when forcing the matter.  While there are no shortage of arrangements, all possibilities that I have looked at have fairly major problems.
Another example is a flat from A to 1.  Obviously wave 1 is the 'c' wave, but it seems that [a] to (5) needs to be labeled as a zigzag family pattern to make the count work.  Again, [b] can be a single zigzag, but wave [d] best resembles a double zigzag structurally.  Even if it is an impulse, wave [e] is very large compared to the possible 'b' wave within single zigzag wave [b].
If there is no sideways wave underway since A, it means (5) is a single zigzag as marked in color.  In order for there to be a double zigzag higher beginning at (4), a corrective 'x' wave following the (5) high needs to complete.  Wave 1 looks very much like an impulse wave and a zigzag-family pattern in that position is very unlikely so a complete corrective wave down is a very weak option.

Even though it is choppy, an impulse higher in the [a] position looks strong while zigzag-family patterns look weak.  Something non-impulsive higher is apparent since [b].  It labels well as an ending diagonal or an impulse to (i) then a sideways correction unfolding and possibly complete at (iv) as a flat.
Like any three-wave move, the action higher since 1 can be a part of a larger sideways wave.  There can also be an impulse higher forming where these three waves are only the beginning.

Find my 350 word conclusion of this market at as well as the consensus of two other analysts and myself.

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