Global market

Weekly Technical Analysis – Monday, Feb 3, 2013

My short-term scenario has proven to be wishful thinking. I was looking for a potential Zigzag down instead the bulls have once again aborted a pullback that in my opinion has been delayed but not removed from a pending outcome.

Regarding the long-term count, I maintain the scenario of a potential Ending Diagonal. If it pan out it will complete the Double Zigzag wave (X) off the March 2009 low establishing a major top.

But instead of an expecting a larger subdivision of the wave (III) maybe price is approaching the end of this wave.

If this is the case then once the wave (III) is in place in the next down leg, in order to be considered the wave (IV) of the Ending Diagonal, it will have to overlap below the peak of the wave (I).

The potential target for the wave (IV) could locate in the range 1463.76 – 1435.50.

In addition, if the Dow is unfolding the same ending pattern, then the wave (III) cannot exceed above 14089.64 therefore there is not much more upside left in order to maintain valid this option.

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