I thought that the market was in either a "B" or "X" wave when the market started to decline later in the day. This would mean another strong rally higher, well into the 1060 - 1081 zone I mentioned in last post. But the last 30 minutes of trading erased that from being a high probability. The market sold off sharply suggesting that perhaps wave ii of (iii) has already topped and now wave iii of (iii) of 3 of [3] or C is now underway. Obviously there should be little doubt this is occuring since a wave at this degree would be almost a straight line down. So a sharp shot lower beneath 1039.83 should confirm that this is indeed occurring.
It is possible that a flat correction could take place with a break of 1039.83, but if it's a sharp shot down on the heels of today's sharp shot down into the close, it would mean that a flat correction is not a high probability.
Above is the alternate count which is also quite possible. This short term bullish count suggests that the decline later in the day was either a wave B or X of a wave ii correction. If so, I expect the market to charge higher into the 1060 - 1081 range before wave ii tops. A sharp decline beneath 1039.83 would make the count suggesting wave ii is still underway very unlikely.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.
3 comments:
Curious as to how do you read today's action? Flat wave 2 (with an expanded wave B)? Or something more drastic UP brewing? Thanks.
Looks more like the former, a flat wave ii correction with wave B ending at this morning's lows and wave C being the big rally all day. What's of note is the ending diagonal looking structure at the end of the rally once the S&P got to around the 1060 area it really struggled for every gain. The internals were strong, well in line with a wave C of a flat correction, but the ending diagonal-looking structure at the end is what's important. It means wave C of ii is almost over, or is already over, and early next week will be hard selling. I'll look more into the possible bullish implications later on post them. But at first glance, I'm thinking the flat correction is top choice.
Thanks. This chart is from midday today,
http://www.screencast.com/t/NzQ1Y2FiM
It could also be a 5-3-5 (abc) or a 5-3-5 (123) to be followed by a 4 & 5.
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