Thursday, October 29, 2009

10/29 -DOW

60 min


30 min


I mentioned in a previous post that an alternate bearish count was possible. I was too focused on SPX at the time that I completely forgot to watch the Dow.

Well here is that bearish alternate count.

This would make sense since the correction today was a sharp zigzag, which is indicative of a wave 2 vs a wave 4. A 4-1 overlap would occur as well if today's retracement were to be counted as a wave 4, so it won't be. SPX technically has not violated the 4-1 rule yet.

Two things on the chart worth mentioning is that price is approaching the 61.8% retracement and nearing a backtest of the March - July low trendline.

But don't forget this chart as well. Because of this chart, I won't be surprised if the indices continue to move higher.

Though the histograms may indicate a change in trend once again, it may correspond with a sharp wave 2 correction testing the 78.6% retracement level.

I do not have one for the Dow at the moment. Suffice it to say, the Dow failed to touched the lower purple trendline like SPX did.

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