Friday 2/28/14 Market Update

Wave [4] still appears to be underway as a sideways correction with corrective wave (B) nearly complete.  [5] may be underway, but price should still approach 1825 before any meaningful advance resumes.

The primary wave count with ending diagonal C of (B) of [4] looks excellent.  The best alternate wave count on the scale above appears to be alternate'.  This option has a somewhat strange double flat congestion area with other structural concerns and states (2) of [5] is underway.  It remains to be seen if the C of (2) pullback to complete (2) would be enough to recharge the market for another soaring advance for (3) like was seen in February.

Alternate'' has some structural concerns and retraced almost nothing, so it seems to be a bit of a stretch.  It also complicates the picture since February.  The action it calls for moving forward is basically the same as the primary wave count (one more new all-time high), so there is not much point in considering it.

The next all-time high, or near all-time high reached by the market should prove to be an excellent shorting opportunity.  This level could be achieved as soon as the open on Monday.  If [5] is underway, price should still reach at least 1825.  But far lower prices are most likely where [4] should be underway as a flat or triangle.

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.