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Monday, September 21, 2009

EOD Count Sept 21

From my last Mid-Day Count today: Mid-Day Count Sept 21 (Update 2)

I believe we are still in a correction, and while it is not a triangle, I believe it is still gaining in complexity and trying to extend sideways. So far I am counting it as a double-three (just starting on the second three). There are a lot of ways to count this one. So while this is my preferred, it is not a "high-confidence" preferred count.

Well, triangle count is out, flat option is in. See my last update post: EOD Count Sept 18. Next we need to watch the C wave of this flat to see if it goes below 1039 (and into the territory of wave 1). We will deal with that count if we come to it (but Minor C would start looking *very* diagonal-ish if that were to happen)

I still think we are in a Minute 4 and we have a double three so far. See the SPX and NDX charts below:

Here is what is looks like so far on the longer term trendline chart:

But how far does Wave 4 pullback? This C Wave has not been channeling very well. And you can see by my notes on the chart below, if it does channel well, then 4 will go into 1. Alphahorn and I were discussing yesterday, that this whole rally, even though is not technically an ending diagonal (it has a pretty clear 5-3-5-3 structure so far), certainly does "act" like a diagonal and has many of the same technical characteristics of an ending diagonal (see this comment):

That is a really interesting observation. Yeah, wave 3 is impulsive, but I agree it is not as impulsive as wave 1. So there is another way to look at it, and it takes a little "interpretation" :) Here goes: The count so far is not an ending diagonal. So far (since July) I count a pretty clear 5-3-5 for waves 1-2-3. However, the move both "looks" and "feels" like an ending diagonal (which needs to be a 3-3-3-3-3).

So stepping back and looking at the overall wave structure, we have a big wedge since March. And since August, we have a wave structure that almost takes the shape of a diagonal. And in diagonals, the 3 Wave is shorter and less dynamic technically than the 1 Wave. So maybe this final structure is trying to fill the "idea" of an ending diagonal (breath is lowering, getting technically weaker, dropping volume, fight between bulls and bears coming to a head) without actually being "technically" a diagonal? Worth pondering at any rate :)

Daily chart (FWIW)

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