Wednesday 2/26/14 Market Update

Wave [4] still appears to be underway given the corrective-looking nature of the rally higher since 2/5/14.  There is a high probability of the market making new all-time highs this year.

Wave (B) of [4] seems incomplete.  A complete double zigzag higher on the scale above seems like a good option (alternate'' 3), but upon closer inspection wave (c) of [b] looks nothing like an impulse wave.

Because of this 3-wave advance from 2/20 (looking very much like a double zigzag), the first thought is a sideways correction underway since the 2/19 high.  The primary wave count is a triangle wave B underway with [c] of B incomplete.  A flat wave B underway is also possible.  The next best sideways possibility is a flat+zigzag double (alternate'') perhaps complete.  This pattern saw such a small amount of overlap into A territory that a complete double seems questionable.  Also questionable is a complete wave B triangle wave (alternate'' 2).  It does not have great symmetry and its 'e' wave seems a bit large.

If the market rallies to a new all-time high from today's low without additional downside first, alternate''' will look like the best option (ending diagonal wave C underway from the 2/20 low).

While the wave count covering the past few weeks is not certain, the overall picture is very bullish with the wave higher since 2/5 very likely incomplete.

Errata: For some time the degree of waves within (5) of [3] on the daily chart were market wrong.  This has now been corrected.

Friday 2/21/14 Market Update

The short-term primary wave count has changed to an alternate option from the last update.  The longer range options remain unchanged however.

2/5-2/19 very likely marked an impulse or zigzag higher.  The pullback that followed set the stage for another wave higher.  Since it was so close to exceeding the initial high made this week, it is almost certainly part of the larger upward structure that began 2/5.

A complete zigzag higher during the period 2/5-2/21 is possible.  The problem is the small size and truncation of it, two uncommon features.  In fact it is not even 23.6% of the size of the first leg, a worse number than the one between the impulse legs of W of (A) of [4].  If a double zigzag higher since 2/5 is underway, another leg higher to probably a new all-time high is required to give 3 waves from the 2/20 low.

The best option among the upward corrective options is the one marked above; a zigzag higher since 2/5 but with C still developing.  I favor this more than impulse wave [5] underway since 2/5 because of the already large size and clear strength of the rally.

A downward flat or something more complex is possible since the 2/19 high.  This would require a relatively complex upward 2/20-2/21 double zigzag with a lack of symmetry so this option is not preferred.

The 2/20-2/21 wave higher appears to be an impulse with some additional action higher.  So this is bullish and suggests eventual action above the 2/19 high.

Wednesday 2/19/14 Market Update

There is some change to the short-term wave count from the last update, but a wave [4] correction still appears to be underway.  Momentum higher is clearly being lost and today the market put in a correction as large as any seen since the rally began on 2/5/14.  This is important because the size of corrections help determine what options exist and which are better than others.

Breaking down the waves higher since 2/5/14, there only appear to be several options for that rally; an impulse higher is still developing with its core not yet seen, a complete impulse higher, and a complete double zigzag higher.  The momentum required for the first option seems impossible.  A complete impulse higher is better, but the structure of the wave is a bit strange; it would make the most sense as a first wave since an all-time high was not seen and its first wave was so large (although it seems very stretched), but it seems very large and very strong to only the first wave within [5].  A complete wave [5] is better than a complete wave (1) of [5].  A double zigzag counts well, makes better sense within the larger picture than the other options, and could even be the first wave of [5] if it is an ending diagonal (a fairly rare occurrence however).  It is the best option.

Putting this all together, in the short term lower prices are likely coming even if the primary wave count is not correct.

Wave [4] appears to be underway as a flat where the February low will be tested, but a triangle or something more complex is possible.