A New Round of Buying

The wave higher that we have been tracking since the 2009 low can be an impulse or zigzag wave.  Beginning at one of the late 2011 lows, an impulse wave higher began and is currently winding down.  An ending diagonal higher that began in 2013 or 2014 at [4], B, or (2) remain good possibilities.  A sideways wave since (1) in 2014 is also still worth considering.

Action higher this year is very choppy and full of zigzags, so it is unlikely that the market is drawing out an impulse wave higher since (2) or [4].  A sideways wave from (3) is possible, but it is then an 'x' wave of a double zigzag since (2).  This is a then a very complex move that has either a proportionality problem with the larger structure (if there is a sideways wave since (1)) or will cause loss of wedging higher and loss of ending diagonal possibilities (The lower red line is very close to current action and it almost certainly will be breached if there is a sideways wave since (3).  In addition, sideways 2nd and 4th waves of ending diagonal are extremely rare).

The low-probability burst higher to a near all-time high causes a significant change to the possibilities by moving options that were previously not strong to the forefront.  While an incomplete sideways wave since A remains weak, a complete zigzag+flat corrective wave in the B position is now a good option.  One reason for this is due to the fact that a zigzag from (4) to (b) of [y] now requires a more complex double zigzag higher beginning at (4).  Still, the superior alignment of the structure of the waves with this wave count for a zigzag higher from (4) to (b) keeps it in good standing.  A double zigzag from (4) works much better with a sideways wave since the last all-time high at (b) for 'x' (so 'x' is of better size relative to triangle 'b' of 'w'), so a retracement back to the 1860s, maybe a bit more, is worth considering.

(c) of [y] can be seen as a double zigzag, albeit not a great one.  There are no problems with a complete zigzag higher from B.  Actually it counts slightly better this way because of the deep retracement last week before the surge back to 1900.  Subdivision is a feature that only adds complexity to an impulse wave and one retracing more than about 61.8% is not that common in second waves.

The structure of the advance since B looks best as described above.  If the market begins correcting Tuesday when the market opens (there is the Memorial Day holiday on Monday), getting under 1892, a 4th wave of [iii] very near the core of [iii] and a support area, would be uncharacteristic of a 4th wave.  Since [ii] is so large, in order for [iv] to gain good proportionality with [ii] while obeying typical guidelines, the market will probably trade in a sideways range for a few days.

Conclusion:

In the short-term, a breakdown into the 1880s under [4] is a signal that ...

Find the remainder of the update at http://www.ewaveanalytics.com.

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 http://www.ewaveanalytics.com as well as the consensus of two other analysts and myself.

Market Retreats: a Complete Sideways Pattern or More Selling to Come?

Last time the long-term options were discussed thoroughly and on this front, the view remains the same.  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.

The waves since 2009 can be impulsive or corrective.  It will take additional action in the next months to years to better determine which scenario is correct.  This very long-term scale is certainly not relevant to the suggestions we post in the member's area.

A sideways correction beginning at (3) is possible, but is not that likely given the longer-term picture.  A sideways correction since (1) would allow this sideways option, but it adds an additional degree of complexity and reduces the proportionality of waves within the pattern.  It also makes the pattern less proportional to its 2nd wave counterpart in late 2011 so it is not that desirable.

A double zigzag higher developing from the (4) low would also complicate the situation, but this move could fit into the sideways option since (1) or the ending diagonal possibilities (the ending diagonal possibilities stay valid as long as price since (4) travels less than the price distance of (3)).

A sideways pattern since A is also a possibility, but a weak one.  A complete flat from A to 1 seems reasonable at first, but is not even suggested above because it is essentially impossible impossible to work into the [a] to C action into any kind of zigzag-family wave.  [b] to [e] also cannot be viewed as a flat when trying to force the matter.

An incomplete sideways correction since A is a better option, but a complete flat lower since [b], the most simple way to work in the waves, is a problem due to the fine structure of [d]; it looks like a double zigzag and if this is true, there can be no zigzag-family wave higher from [c] to C.  If there is no complete flat in this position, things get complicated in a hurry.  Maybe there is a double zigzag higher since [a], but [b] it hard to work in as a single zigzag.  This would also make the double zigzag since [a] very large in relation to [a] which is not that common.

There is probably a complete single zigzag higher since the (4) low because it has no problems intrinsically, is simple, and works well with the good longer-term options.  Especially after the breakdown this week, this possibility is clearly the most natural way of counting the structure.

Last time, it was stated, "[Thursday] prices should continue to sell-off.  There can be a gap lower and if there is, this will probably prove the be the core of an impulse wave down beginning at C."  The gap did not form all of the core, but prices did continue to sell-off in an impulsive fashion exactly as expected.  There is now very likely a complete impulse wave down to 1.

It is not exactly clear what is forming since 1, but this so far has a corrective look to it.

Continue reading my commentary, the work of two other analysts, and the consensus opinion at http://ewaveanalytics.com.