Tuesday, March 9, 2010

Market Timing Update (3/9/10 Close)

Stocks-The Transports, NDX and the Russell 3000 index joined the other indices and made new recovery highs today. The next up is the Russell 1000 index, which is only 1.08 index points away from a new recovery high from today's high. The Dow and the SPX are yet to get there. Overall, short term market conditions are favorable to the upside given the momentum across indices.

However, wave structures calls for an end to the advance since the Mar 4th low (Chart 1 SPX mini), and potentially since the Feb 25th low (Chart 2 Dow mini), as well as potentially that since the Feb 5th low. This offers a sliver of hope for a non-confirmation between these senior indices and the rest of the pack and a "P3"-like count in the Dow and SPX - see the first scenario discussed in An EW Roadmap (3/5/10). The risk to calling the top or a near term top is an extension of the small-degree 5th wave, or an extended 3rd wave one degree higher, or this top is only A of (Z) - a variation of the second scenario discussed in An EW Roadmap (3/5/10).

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