I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Thursday, June 10, 2010

A Third Look at "Always Another Option"

And you know what they say, the third time's the charm :)

But lets get this out of the way:

The Leading Diagonal is dead

Goodnight LD. We hate to leave you. .... :)

So, lets rewind to yesterday: Another Look at "Always Another Option". Here is what I wrote in that post

But here is where this count comes in. *If* (this is not my preferred count, this is a "just in case" count at this point) we break above the upper trendline on the LD on this wave without making a new low, I feel the LD count will be invalid (or else severely truncated, which I don't buy). So in that case everybody jumps bullish. But this count suggests that it would be a bull trap of epic proportions.

... Mr. Market sure is being quite devious at this juncture.

Well we did break the upper trendline on the LD without making a new low. This is why I consider the LD to be dead.

But does that mean it's super rally time? Not so fast.

So far this move off the bottom is not developing impulsively. Like I point out in my last post LOL!, look at the entire wave structures in yellow. *VERY* similar in both cases.

This is another overlapping mess. I am really skeptical that we are in an impulse up.

I think the next target is 1110 (38% retrace of the whole down move). I will re-evaluate once we get there. But like I point out above, this could be a big bull trap. 1110 is some serious resistance since it was tested and failed the last time. I am still sticking with my shorts, and may consider adding at 1110 depending on how the wave looks. I am going to be very patient with this wave.

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