Wednesday 3/5/14 Market Update

There is no change to the long-term view from the last update.  Given the structure of the rally since 2/5/14, wave [4] still appears to be underway as a sideways correction.  A swing lower is expected, but the rally that began in 2009 is almost certainly incomplete.

So far there is a 3-wave advance higher since 2/5/14.  It would be extraordinary if this rally develops into 5 waves because of the shallowness of the correction the past few week and that fact that a number like 2000 would be expected at its termination.  In other words, it seems like it would take an impossible amount of momentum to yield an impulse since 2/5.

A zigzag family pattern higher is far more likely.  A single zigzag is the most simple and preferred (especially since (A) was a double zigzag), but if the market continues to flirt with new all-time highs Thursday and/or Friday, a double zigzag (alternate'') will become the favorite option.

An ending diagonal wave [5] could be underway since 2/5 (alternate'), but keep in mind, as always, that these patterns are just not that common.

The waves today were confusing, but even if alternate'' is correct, there should be a test of 1869 again to give proportionality between the 'b' corrections of a double zigzag higher from 2/5.

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.