Summary for Week Ending 15th September 2006
Again the news for this week is mostly centered around the price of Oil. With the slide continuing and media pundits declaring that it will drop below $50 before xmas has everyone very excited.
Last week...
Whilst unsure, I was looking for a counter trend rally. Well we got a rally alright and it wasn't counter trend, instead we got a good solid rally into new territory. It would appear that I had miscounted the waves, with the currently marked up wave 4 of similar dimension to wave 2 (Mondays slight dip gave up the required amount). Following on from the brief dip at the start on Monday the market rallied very strongly to take out to new highs and I'd have to venture that the old high of May is in sight. This has put a cat amongst the pigeons for my belief that the market was to track sideways since we have been watching a very painfully slow rally to recover the old high. To put this in some context, the initial decline took 37 days from March 8th to 14th June. Its now 93 days later and we are yet to recover all of this ground that was lost, so the rally back has been very painful indeed. I fully expected that the market would rally to about 60% retracement and then track back down and sideways and this is how the time would be absorbed, but I was wrong again on this. the time was absorbed, but the pattern was not what I had expected.
Next Week...
If we just count waves without a nod to Elliot we can easily count that we are in the 7th wave or they 4th wave forwards. This is generally about as much as one can expect in any movement, and it would take a strong push to get out 9 or 11 waves, and this movement so far has not been strong. Also historically we are entering the bearish time of the year, so maybe we are looking at a false break setup. Either way, intent is still bullish.
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