Monday, October 25, 2010

Wave Count Satisfied

Today the Qs came within 0.16 of the lower cited target for the ascending triangle pattern. We can also see a clear 5 wave impulse down from the morning high followed by an upward correction. That is no guarantee that a top is in, but the pattern can be counted as complete at this point. We will need to see a move below 51.55 to rule out an extension of the move from the wave e low of the triangle, and a move below 50.52 to feel confident that the pattern isn't morphing into another ending diagonal.

Given the close near the low of the day after the strong morning gap, I suspect that today was a least a short term top. If it is we should see a fairly quick acceleration to the downside. Coming under 48.98 the low of the April high week should greatly increase the selling pressure.

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