Stock Update - 3/23/10

Todays price action in the Dow invalidates the ending diagonal count. The commentary from 2/19 now appears the correct outlook:

"A mild correction may form the right shoulder of a head and shoulders bottom followed by a rally above the January high. If so, that rally could be quite strong and last possibly into late Spring or Summer. That could indicate the original bullish wave three of three count(or wave five) from the March/09 low was the correct wave count. The wave X of (X) of [4] count shown last time, could also be valid in that scenario. It all depends on how the wave structure develops."

If this is a wave five up from the March/2009 low, then it must be less then 2100 points. That is because wave three was 2100 points and wave three can never be the shortest wave. 2100 points up from the Feb. 5th low of 9823 gives 11,923 as the maximum length of wave five. However if this is wave three of three or a wave X, then there is no such price limitation. For now the next price target is 11,020.

Note: After one year of doing this blog, this will be the last of the regular blog posts for the indefinite future. That is so I can spend more time on my trading and do some research. However , I will do an update if I can identify a major turning point such as the July/2009 or March/2009 lows.