Friday 3/14/14 Market Update

In the medium-term, there is still a clear 3-wave pattern higher since the 2/5/14 low.  If this move is to develop into an impulse, the primary count is correct.  A good second option is a sideways wave [4] still developing (alternate').  This is not the favored option because it is adding complexity to the picture; waves [2] and [4] are already proportional to one another.  An ending diagonal wave [5] is possibly underway, but this is not a very common pattern.

The waves the last two weeks have been very challenging to read.  There may be a two zigzags lower from the Tuesday high, but there is not much proportionality between the 'b' waves of these zigzags.  A better option is the impulsive option illustrated above.  Note that wave [iv] can be a second wave if alternate' is correct.  It could also be an 'x' wave within alternate''.

The C impulse down from the Tuesday high can be complete, but so far there is only marginal proportionality between [ii] and [iv].  [v] is also quite small relative to [i] and [iii].  A greater retracement of (1) would bring greater balance to flat (2).

The long-term view remains unchanged from the last update.  The shorter-term charts above strongly suggest new all-time highs ahead.

Wednesday 3/12/14 Market Update

The primary wave count has now changed to alternate'' 2 from the last update.  Even if this wave count is wrong, it is extremely likely that the wave higher that began 2/5/14 is not yet complete.  It remains true that the bull market that began in 2009 has at least a couple of months of time remaining before it completes.

So far there are three waves higher since the 2/5/14 low.  There is a sideways correction underway since [3] or an impulse higher is underway since 2/15.  When considering the subwaves, a double zigzag higher from the 2/5 low is only an alternate count, alternate', due to the lack of proportionality between the 'b' waves in its zigzag legs.  The short-term chart below strongly suggests a new all-time high coming soon, thus a zigzag higher since 2/5 is not likely (unless the impulse higher developing since the March low is wave 'c', but this seems a bit complex).

The structure lower since the Tuesday high looks like a clear zigzag.  Really the entire structure down since Friday is essentially impossible to label as impulsive.  I suppose this whole move could be wave 1 of a leading diagonal lower, but this seems amazingly complex and in a pattern that is very uncommon.  A better option is alternate': alternate with [a] of Y at the Friday high then [b] completing at the Tuesday AM low followed by an extremely short and truncated wave [c].  This is a strange and poor option because of the proportionality problem between [a] and [c] however.  Far more likely is a test of the last all-time high.  That level should not stop price because of the already large size of the pullback since the last all-time high in relation to the impulse higher since the March low.

Friday 3/7/14 Market Update

An impulse higher since the 10/4/11 low still appears to be unfolding where new all-time highs in the months ahead are very likely.

So far there are only 3 waves higher from the February low.  This wave can be the first wave of an ending diagonal, a zigzag, or an impulse wave higher developing.  A more complex option is a double zigzag developing but nearly complete.  The important thing to note is that all options point to a continuation of the bull market in the months ahead.

An ending diagonal higher is possible, but this is not a pattern typically seen.  As discussed in the last update, a zigzag higher (or the more complex double zigzag option) works best with the technical picture of the market; the market would need to put on quite a demonstration of strength for the next month if an impulse higher is underway and not even half-way complete to regain the momentum that has been lost during the last few weeks.  The catalyst of the jobs report on Friday was a chance at regaining some momentum higher, but instead the market put in its 3rd consecutive indecisive trading day in a row with price again closing nearly unchanged.

In the short-term, no matter the wave count, the market correction looks incomplete since the last all-time high on Friday.  The reason is the low, sideways action that is the rebound from the day's low.  A weaker option is the complex flat+zigzag double since the Tuesday high.