Comments from ChartsEdge, and from me - on the gap this morning, and the markets

First, the comments from ChartsEdge which relate back to their daily (and weekly) cycle forecast charts:

Gap
Posted: March 30th, 2009
Author: Mike Korell
Filed under: One-Day Market Map

The Gap this morning [indicated on the ChartsEdge daily map for today, a gap up] is obviously not correct. This represents a shift in not only today’s chart, but also in all of the Market maps for the rest of the week if there is not a substantial rally today to offset the correction lower.

Since the regular cycle charts show a rally today, it is likely that the top of this move is now in place.

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Folks, now my own comments. We all knew already (or should have known!) that the markets are rather treacherous nowadays. We can all debate whether or not "news" plays a role in affecting the Elliott Waves, etc. News such as the U.S. President removing the head of GM, for example.

I'd like to refer back to posts I've made about the Fibonacci clusters in this area, which give probabilities for this being a reversal zone area. Never a certainty, but a probability, which coupled with the supply overhang in this area and signs of the markets being overbought, raised a cautionary flag into last which I and others pointed out. Also my posts about the banking sector (you can find under the "Banking label") which raised concerns about that index running into resistance levels.

How do we now use the ChartsEdge maps for the day and week? Remember that they tend to depict cycle timing, not necessarily the absolute (or even relative) price levels. When there isn't an undercurrent of market bias, the price levels they show tend to work well, but we must always remember to focus on them in terms of pointing to relative high and low/weak spots as time goes by in the day and week. So if you are daytrading, or very short-term (1-4 days) swing trading, you can still use them for reference.

How to interpret the Elliott Wave count here is something else. I had posted a rather ugly alternative view, that suggested the move up might be done or almost done, but I admitted that the count had some problems. I still think that way of viewing the count had problems. Maybe a kinder way of viewing it would be to say that the wave 1 or A was done, and it wanted to start an expanded flat. Or maybe it is just something else. Meantime, we've got our Fibonacci levels to watch and the technical indicators. Later today, we'll also have Terry Laundry's T Theory update relating to market breadth (which we already knew from the McClellan oscillator was getting tired out).

Be careful out there, good luck and happy trading!
(Or if you aren't trading but just watching, it should be another interesting show!)