Wednesday, December 9, 2009

12/9 - EOD

Ok. Some slight adjustments had to be made since the previous count resulted in a 4-1 wave violation.

My primary count at this point is a nested 1-2 wave count. [(i)blue and (ii) blue, i black and ii black on the chart]

I am expecting wave ii black to top either near 1098 (50% retracement) or 1101 (61.8%) before a wave 3 takes us lower towards 1060 (This target relies on the weekly MACD crossing, which is very close).

Other folks have the move down from 1119 as a Leading Diagonal. I did not label this but wave iv of the LD would replace my wave ii black. That would leave a wave v down to come that would probably hit 1080. I think this count is pretty valid as well since it correlates well with the daily MACD analysis I have been doing.

If the LD plays, watch out for the sharp reversal higher once it completes.

The other alternative is the expanding diagonal I have been talking about. Wave (e) of that structure has not completed yet if this is a legitimate count. That would take price towards 1070 or so.

So I'm still expecting a move lower but will be keeping an eye on what price does at 1080 and 1070.


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