Dow moved above 12,000 level again at 12,153 which is about 5% below its 2011's high of 12,810. With the rebound on Thursday and Friday, Dow has formed a contracting wedge that can breakout on either sides.
In the next few days if Dow breaks out of the wedge on the down side, then my previous wave count can still be maintained, i.e. Dow has completed its wave 2 and has started its wave 3 of major wave C.
However, if Dow breaks out on its upper sides, then it is likely that its wave 2 has not been completed yet as shown below.
Can austerity measures solve the debt problems of Greece and Italy? Ireland has put in place its austerity programme but its current unemployment rate is about 14% and the Irish bond yield is above 8%.
The austerity budget approved by the Italian Senate is going to slow down the Italian economy further, GDP will be lower and with a higher borrowing cost I don't think its debt position can be improved.
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