Nate's Market Analysis

Thursday 2/2/12 Market Update

2012-02-02T17:52:00.002-06:00

There is no change to the count from yesterday's update, but the near wave crossing today brings some question to the short term action. The alternate count above is now a greater probability, and so is an ending diagonal wave [v] since Monday.

Unless the core of the impulse that began in December is in the place that the alternate count points out above, there is a good chance that that wave will complete soon with wave [v] underway.

There is still no change to the longer term view.

Wednesday 2/1/12 Market Update

2012-02-01T19:42:00.002-06:00

There is no change to the count from yesterday's update. The move higher since yesterday's low best resembles a 3rd wave higher. It may be a first wave if there will be an overlap with yesterday's high.

An impulse higher that began in December is likely in its later stages. There should be a final high over January's high coming within the next few days.

In the longer term, there is no change to the count above.

Tuesday 1/31/12 Market Update

2012-01-31T21:01:00.002-06:00

The market had a strong up move today which retraced all of the downward impulse that began two days ago near the close. Given that there was only one impulse down before this, the downward action since last week's high now looks highly corrective.

The alternate count in yesterday's update is now the primary count, and the primary count there is now the alternate count. A rally lasting several days is expected before the impulse that began in December is complete.

There is no change to the count in the longer term. Short term action still suggests it is not likely to change soon even though prices may continue to drift higher.

Monday 1/30/12 Market Update

2012-01-30T18:00:00.003-06:00

There is no change to the count since Friday's update, but the primary count is now a lower probability. The market made a nice move down today, but the rebound retraced so much of the decline that alternate counts should be seriously considered.

The alternate above is fairly clearly the best option because it works the best in the larger context. The main reason is due to the zigzag October rally and its strong likelihood of fitting into the count described below, not a piece of some other sideways wave.

The count above suggests an unfolding flat since the May or July high. There is no change to the longer term view.

Friday 1/28/12 Market Update

2012-01-28T00:09:00.002-06:00

There is no change to the count from Thursday's update. Labellings have been added to the decline following Thursday's high. It charts surprisingly well as an impulse and is difficult to label as a correction.

The rally today and ensuing sell-off into the close is interesting. It suggests an upward correction since Friday's low.

The best count appears to be a complete upward impulse since the December low as labeled above. A move under Friday's low and then under the support from last week will lessen the probabilities of the above alternate counts considerably.

In the longer term, a downward correction since the May or July 2011 high is still likely underway. A complete rally that began March 2009 is very unlikely given the large retracement of the sell-off following the last recovery high.

Wednesday 1/26/12 Market Update

2012-01-26T16:19:00.003-06:00

There is no change to the count from yesterday's update. The impulse wave that began yesterday now looks complete.

If the market does continue higher, continuing the impulse wave that began at the December low, the alternate count above will be the preferred one. This is not a bad option, but not the most straightforward or natural one. As mentioned yesterday, a lower probability count is the second alternate above which suggests a multi-week or multi-month rally is still ahead.

There is no change to the longer term count. A downward flat underway since the 2011 highs is the greatest probability. Although eventually expected, the March 2009 low will likely not be tested soon.

Wednesday 1/25/12 Market Update

2012-01-25T18:33:00.003-06:00

Wave [iv] may have been a double as described above. The count from yesterday's update has been changed to show this, but otherwise there is no change.

An impulse wave higher following today's low is fairly clear. It appears to be nearly or fully complete unless [v] began yesterday. Because it would be a bit unusual for [v] to subdivide to this extent and the retracement of its first wave yesterday is large, an impulse higher beginning yesterday is listed as an alternate above.

It is possible that the impulse higher that began last month had its "3rd of a 3rd wave" just last week. This suggests the rally underway will continue for weeks or months more. This wave would lose proportionality with the waves around it if this were to occur, so the count is only an alternate. The wave (W) rally that began in October is clearly corrective, so a more impulsive rally underway since November is not likely.

A downward correction is still likely underway since May or July. But the rally since March 2009 is still very likely incomplete.

Tuesday 1/24/12 Market Update

2012-01-24T18:23:00.002-06:00

As mentioned in yesterday's update, a move under yesterday's low would make a complete wave (v) of [iii] most likely. The large retracement of the wave down beginning at yesterday's close makes the action since yesterday's high look clearly like a zigzag down.

If prices turn after testing the high yesterday, a sideways wave [iv] correction may be underway. This is not likely however.

Wave [iv] looks complete given the size and form of wave [ii] from last month. Wave [v] should be underway. The 1330s are a good target for this wave considering the size of [i].

The count above remains very valid. Prices may continue to the 1350-75 area (or even beyond), but this is not a requirement.

Monday 1/23/12 Market Update

2012-01-23T19:09:00.002-06:00

The impulse wave that began 1/13 is likely in its final stages as described in Friday's update, (following the count above) or already complete (following the"or" count below). If prices move under the low today, the "or" count will be the best option.

On a larger scale, the alternate' count above is possible. But because of action just after the "3rd of a 3rd" wave, this count is not favored.

A zigzag higher likely unfolded during October. Thus there has been a counter-trend move within a larger downward wave. But given the massive retracement of the decline following May or July 2011, the rally that began March 2009 is very likely not complete.

The primary count is an underway downward wave x flat since May or July 2011. Wave x is contained in a double zigzag that began March 2009.

Friday 1/20/12 Market Update

2012-01-20T15:43:00.004-06:00

In the short term, the alternate count from yesterday's update is now the primary count. This is due to the sideways action today.

Wave (v) of [iii] appears to be winding down. If labels are moved a bit, wave (v) of [iii] may actually be wave [v] as the alternate above shows.

The rally since March 2009 should still be underway. A break in this uptrend began in May or July and should continue for months more.

Thursday 1/19/12 Market Update

2012-01-19T16:48:00.004-06:00

The rally today brings about a new count since the December low as shown above. The alternate count above was the primary count in yesterday's update.

Considering momentum but also the size of (v) of [iii] in relation to wave (i) of [iii], the best count is an extending 5th wave as shown above, not a symmetrical impulse (the alternate), in my opinion. The expectation is for the wave [iv] correction to begin tomorrow

In the longer term, the count is now a wave x correction underway since either the May or July high. That puts wave [B] underway now as a double zigzag following [A].

The reason for the change is due to the now massive retracement of the wave down beginning May or July. With a retracement greater than 78.6%, a second wave bounce following the October low is a very low probability. There is a better chance a zigzag down since May or July is underway, but this is no longer a good choice.

An estimation for the termination of [B] is 1350.

Wednesday 1/18/12 Market Update

2012-01-18T15:59:00.002-06:00

With no change to the count from yesterday's update, there is little to add. Wave [v] still appears to be an ending diagonal underway. Wave (iii) should be in its late stages or complete.

The uptrend continues since the December low. This should terminate soon after [v] completes.

The count remains unchanged. The options on this scale were presented in Friday's update.

Tuesday 1/17/12 Market Update

2012-01-17T19:17:00.002-06:00

There is no change to the count from Friday's update. It was expected for the market to move higher and above last week's resistance as it did today.

Because the rally following Friday's low is clearly 3 waves, an ending diagonal or impulse wave since that time may be underway. If it is an ending diagonal wave [v] as illustrated above, the pullback today may not be complete.

A sell-off should begin soon, but first the impulse wave higher that began at December's low must complete. The count for this wave above is not desirable, but appears to be the most probable. A complete impulse wave is not a high probability at this time given the short term action today and Friday.

The longer term view was expressed in detail in the last update. A sell-off should begin soon, but is likely only a correction within the larger uptrend since March 2009.

Friday 1/13/12 Market Update

2012-01-13T22:41:00.005-06:00

The morning action today clearly brings change to the count seen in yesterday's update; the alternate on the scale above is now the primary. The wave structure of the impulse since the December low is far from desirable, but it appears to be the best option given today's overlap of last week's waves. But on the other hand, there is now greater proportionality between A and C.

In the short term, wave [iv] looks like a fairly clear double. Wave [iv] may be a flat with [v] complete at Thursday's highs, but the wave structure of the Thursday rally and Friday decline are both corrective 3-wave patterns.

In the longer term, there are a surprisingly large amount of options now present. Given that wave C of (Y) is expected to terminate soon (perhaps early next week) at a level not much greater than the high of (W), the probability that an impulse lower has unfolded since the last recovery high is suddenly much greater because of the expected retracement level at termination of the post-October rally. But for weeks prices have been spending considerable time above the 61.8% retracement level which is not typical for second waves, so an 'a' wave down has the best probability, no matter the longer term count (guidelines are bent more often in corrective waves). So a sideways correction underway following the year 2000 is still preferred.

If there is a complete single zigzag higher since March 2009, with no second zigzag higher following, the proportionality in the long term (following 2000) suggests that the most likely count is a sideways (x) wave underway with b down just beginning at the last recovery high. There is a good chance that a flat has already unfolded 2000-2009 given its structure and the 3-wave appearance to the post-March 2009 rally. This rally has been small in size and time in relation to the large 2000-2009 flat which suggests there is more to come of an upward correction since March 2009.

(x) can be a sideways correction, but it is important to recognize that 'x' waves are most typically zigzag-family patterns. So given the facts presented, the best remaining option is still a double zigzag correction higher underway since March 2009 with its 'x' wave incomplete.

Wave 'x' can be a single or double zigzag and unfortunately the sub-waves are not clearly pointing in one direction or another at this time. There is some slight preference to a double zigzag lower when factoring in the structure of the action since July 2011, but this does create a more complex double zigzag 'x' wave which is not desirable. Since the options are so close, there is an "or w" labeling marked above.

As a final note, regardless of precise form, a downward 'x' wave since mid-2011 is probable for an interesting reason. If the market will sell off to retrace most of the post-March 2009 rally following a complete single zigzag higher from that time, there is some added undesired complexity to the larger picture. The small size of the 'a' wave down already complete following the recovery high implies the 'c' wave following will be quite large and out of proportion with 'a'. Again, the market usually traces out waves well-proportioned with one another in a simple fashion.

The longer term view (2000-present and earlier) can be seen visually in this long term update.

Thursday 1/12/12 Market Update

2012-01-12T16:26:00.002-06:00

Price broke down to just above yesterday's low after the morning gap higher. The "or" short term count from yesterday's update is being used above, so there is no change to the count.

The impulse count since the December low appears to be right on track with market action. A continued grind higher for several more weeks is the expectation.

There is no change to the longer term picture; a correction higher since early October looks likely. This action should be part of the downward correction since the last recovery highs which is within a continuation of the uptrend that began March 2009.

Wednesday 1/11/12 Market Update

2012-01-11T19:09:00.002-06:00

There is no change to the count shown in yesterday's update and earlier. There has now been a fairly deep retracement of wave (3) after today's drop, but prices rebounded favorably to give a corrective appearance to the downward waves following yesterday's high.

A continuation of the wave since the December low is expected for several more weeks, and possibly for over one month. The alternate impulsive count above is the next best view of the action for that wave, but has considerable problems.

There is no change to the longer term outlook discussed yesterday and in prior updates.

Tuesday 1/10/12 Market Update

2012-01-10T17:46:00.002-06:00

There is no change to the count from yesterday's update. Today there was likely a "3rd of a 3rd" wave higher just like the count had been anticipating.

Today's trading low can be taken out, but action should generally be 2-sided, not just down, for the count to remain intact while a downward correction completes.

If the impulse count is correct since the December low, this wave higher should continue for several weeks more. A zigzag in in this position is the next best way to describe price action with perhaps a sideways correction underway since the October high.

Looking at a longer term picture, the October rally is a clear corrective wave higher. The preferred count is clearly an upward correction since the October low. A double zigzag as described above is the most simple way to describe it.

Given the large retracement of the decline following the 2011 highs, the uptrend since March 2009 is still likely underway.

Monday 1/9/12 Market Update

2012-01-09T20:27:00.003-06:00

The count has not changed following Friday's update. In the short term, the trend still looks higher with a downward sideways correction underway or complete.

An incomplete impulse wave higher since the December low looks probable. Prices should move higher quickly to preserve the count however.

It is possible that the core of C is already complete, but the depth of the sell-off that followed makes the count look questionable. On the other hand, the wave cannot subdivide forever and is already complex.

There is no change to the longer term count. An upward correction should be underway since October, but the uptrend that began March 2009 is likely not complete.

Friday 1/6/12 Market Update

2012-01-08T22:17:00.003-06:00

There is no change to the count since Friday's Update. Wave (2) may not be complete, but Friday's low should provide support in the uptrend that appears to be underway.

With no good complete corrective or impulsive wave count since the December low, an uptrend still appears to be underway. The complex subdivision of the rally makes the impulsive count not a high probability however.

There is no change to the longer term count.

Thursday 1/5/12 Market Update

2012-01-05T17:34:00.003-06:00

The morning drop caused some change to the short term count from yesterday's update; the alternate is now the primary.

There was a sharp bounce following today's decline that retraced almost all of the downward action that began Monday. Those downward waves now have a clear corrective appearance. In addition, the action higher beginning at the December low is difficult to view as a corrective wave, complete or incomplete. And an impulse higher since that time is clearly not complete. So none of the longer term views have changed.

A test of the last recovery highs is expected in the early part of this year.

Wednesday 1/4/12 Market Update

2012-01-04T19:17:00.005-06:00

There is no change to the count from yesterday's update. The market had a larger setback than usual for a 4th wave today, but the from a momentum perspective, a 3rd wave unfolding yesterday seems most likely.

The large retracement of the last of the 3 waves lower that began yesterday was retraced almost completely. Following yesterday's high, a correction lower looks likely.

There is no change to the count above; a correction higher underway since October appears to be most likely.

The uptrend that began March 2009 should still be underway.

Tuesday 1/3/12 Market Update

2012-01-03T21:24:00.003-06:00

There is no change to the count since the last update; in today's strong move upwards, the market likely traced out a "3rd of a 3rd" wave higher.

The primary count is an impulse higher unfolding that began 2 weeks ago. A correction higher unfolding since October is very likely for the same reasons discussed here multiple times.

In the intermediate term, the last recovery high should prove to be formidable resistance given the corrective appearance of the waves since October. A bearish impulse down unfolding since the last recovery high is possible but not likely given the size of the rally since October however. If prices continue to approach or reach new recovery highs, as the short term count suggests, it will be very likely that a sideways correction since July is underway with the rally since March 2009 continuing.

Thursday 12/29/11 Market Update

2011-12-29T17:41:00.003-06:00

The labellings for (ii) of [iii] lower have changed given the >61.8% retracement of that decline. Although it does resemble an impulse wave best, a (poor) 3-wave correction, a double zigzag, can be found as marked above.

The alternate proposed above is possible, but for reasons listed yesterday, it is not desired. In the longer term, nothing has changed the view that an upward double zigzag correction as labeled above is unfolding. The form of the October rally and clear 3-wave decline following strongly suggests an upward correction is underway since October.

In the longer term, a second wave correction since early October is possible, but the retracement of the prior sell-off suggests the bull market since March 2009 is still underway.

Wednesday 12/28/11 Market Update

2011-12-28T18:37:00.002-06:00

There is no change to the count from yesterday's update, but it is now of a lesser probability given the structure of the sell-off today. There has been a large retracement of the wave (i) of [iii] impulse as labeled relative to [ii]'s retracement and the correction looks incomplete, so other options should be considered.

A good alternate working well with the larger waves is shown above. Because it seems a bit complex, there is still room for (ii) to proceed, and there are some labeling issues with a 3-wave [a] of A of (X), labels have not been changed.

There is no change to the longer term picture.

Tuesday 12/27/11 Market Update

2011-12-27T19:14:00.003-06:00

There is no change to the count from yesterday's update and earlier. The impulse wave that began last week appears to have completed with a downward correction now underway. This can be either (ii) of [iii] or [iv].

The market has entered an important resistance zone that may be broken in the coming weeks or perhaps later in 2012 after a consolidation period. A zigzag higher unfolding since the November low is expected even if a sideways correction is still underway since October.

An uptrend since early October appears to be underway but in a corrective fashion. Since there has been such a large retracement of the post-May 2011 decline, a continuation of the trend higher since March 2009 looks most probable but not by a wide margin.