It now appears that Minor Wave 4 is not yet completed. A closer examination of the waves suggests that the bottom at 1400 hours was an impulse, finishing off Minor Wave 3. However, both the rally from that low and the subsequent decline into the close were a-b-c waves. It should come as no surprise that Minor Wave 4 may retest the 50-day moving average before selling off. The Wave structure suggests either a 12.9 hour or 17.2 hour decline may follow, finishing intermediate Wave (1) by Friday’s close or Monday morning.

The Weekly Unemployment Claims are probably being looked at as a “Taper off” scenario by the algos. ZeroHedge comments, “

While largely noise in the context of the big picture, last week's multi-year low in initial claims of 320K (revised upward as usual to 323K), driven in big part by the specific furlough situation at the automakers, reversed and rose by 13K to 330K, or 6K higher than expectations. This was the highest claims number since July 19, the biggest miss to expectations and also the largest weekly jump in 6 weeks.”

The problem is that BLS has an issue with underreporting the state of the unemployment picture.

Regards,

Tony

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