Tuesday's Market 09/25/12

 

The market opened higher today, completing a higher degree 5 wave sequence from 1452.06 at 1462.80, and yet another higher degree sequence at 1463.24. This turned out to be the high of the day, as the market went into selling mode from this point. By early afternoon, the market had fallen below yesterday’s close, and after a short rebound, continued the rather steep decline. A 5 wave sequence from the high was completed at 1450.23, and another higher degree sequence completed at the day’s low of 1441.65.

 

The move higher completed in a sequence of diminishing wave length sequences, which usually precedes a precipitous move in the opposite direction. That proved to be the case as the market moved sharply lower, interestingly enough in another series of diminishing wave length sequences. This may presage a sharp move higher from this point.

The early move higher was expected, but I had not anticipated the sharp move lower that followed. When the market moved below the short term 1449.98 low, my interpretation of an inverted corrective wave 2 playing out from 1438.74 was no longer valid. The most likely scenario at this point is that wave 2 completed at 1428.98, following the 1438.74 high. From there, a 5 wave sequence completed at 1474.51 and another at 1441.65. This could be waves 1, and 2 of the next sequence higher.1428.98 now becomes the critical level. If the market breaks below that, this correction could move longer lived.

 

Short term support is now at 1426. A move above 1448.05 would most likely mean the market is headed higher once again, possibly towards 1497.

Monday's Market 09/24/12

 

The market opened sharply lower today, dropping quickly to 1452.06. After that the market staged a rally that lasted into the afternoon. After rising to 1456, the market fell back to 1453, and then moved higher to 1458. Another pullback dropped the market back to 1454, before the final stage of the rally took the market to 1461. After that the market moved lower into the close, falling to 1456.51.

 

The opening drop today stopped at the lower end of the 1455-1452 support level I mentioned over the weekend. It looks like I had the count from 1466.76 slightly wrong, with this morning’s drop likely the completion of a 5 wave sequence from that high. The rally off the 1452 low formed a 5 wave sequence that ended at 1460.72, which was then followed by a 5 wave corrective sequence down to 1456.51.

 

My current count still has 1438.74 the completion of a 5 wave sequence from the 1267 low, with wave 2 of that sequence likely terminating at 1449.98. I continue to look at 1497 as the next target.

Shorter term, support should remain at 1452. Short term resistance should be 1462 first, and then 1466-1470.

Weekend Outlook 09/23/12

 

After having reached a new uptrend high of 1474.51 the previous Friday, the market started off the week by continuing to consolidate those gains. Monday proved to be a down day for the market, with the market falling to 1456.13. After hitting this point, the market tried to rally over the next several days, but that rally was somewhat subdued, with the market making it back only to 1465.15, before turning lower once again. The market then dropped sharply at Thursday’s open, falling to 1449.98. The market staged a more robust rally from there, rising to 1461 on Thursday, and then opening strongly to the upside on Friday, hitting 1467.07 before falling back. By the end of the day Friday, the SPX had given up its earlier gains, dropping back to 1459.51 near the close.

 

My current count had the high of 1438.74 that occurred on September 10^th as the completion of a 5 wave sequence from the 1267 low. From that high, the market has now completed an inverted corrective wave 2, which ended at Thursday’s low of 1449.98. This sequence took the form 1438.74-1428.98-1274.51-1456.13-1466.76-1459.51. If this count proves to be correct, I would expect a resumption of the uptrend. My target for the next move higher remains 1497.

Short term support is 1455-1452 if the market moves lower; with a move below 1449.98 most likely meaning my count is wrong.

 

 

Thursday's Market 09/20/12

The market opened sharply lower today, continuing the slide from yesterday afternoon’s 1465 high. The market first fell to 1453 and after a slight bounce to 1455, dropped to 1450. From that point the market started to rally, rising to 1458.77 by midday. This was followed by a pullback to 1455, and the another rally to 1461.23. The market then dipped near the close, hitting 1458.58, and then rose into the close.

 

Yesterday I said the rise from 1456 to 1465 appeared to be 3 waves of a 5 wave sequence. This, in fact, turned out to be the completion of a 5 wave sequence. The drop this morning then completed a 5 wave sequence from 1465. I also said that should the market fall below 1456, support should come in near 1450. On this count I was right, as the market fell to 1449.98, and then rallied the rest of the day.

 

On the 15 Minute chart, I have labeled today’s 1449.98 low as the completion of the 5 wave inverted corrective wave 2 from 1438.74 that I have been alluding to lately. If this count is correct, the market should now resume the rally from 1266.74. My next target is 1497. If the market drops below 1450 at this point, the next support level would be 1426.

 

 

Wednesday's Market 09/19/12

The market opened slightly higher this morning, hitting 1460 before pulling back to 1458. That pullback was followed by a sharp move higher to 1463. That rally was quickly followed by another move back to 1458, before the market moved higher once again, this time moving up to 1465. After a pullback to 1462, the market rallied back to 1465, but failed to move above the previous high. The market then moved lower near the close, with the drop accelerating into the close, dropping the market to 1461.

 

The move to 1465.15 today seems to complete a 5 wave sequence from 1456.61. This would mean that three waves have completed from 1456.13. If this is wave 4 of that sequence, it should terminate near this level in order to project wave 5 to my target of 1497.

If the market continues lower, it should find support first near 1450, and then 1426.

 

 

Tuesday's Market 09/18/12

After opening slightly higher this morning, the market quickly moved lower, making a slightly lower low than yesterday at 1456.13. After rallying back to 1461, the market fell back to 1457, and then traded in a narrow trading range for the remainder of the session.

 

I mentioned yesterday the possibility of the market making slightly lower lows today, and that is what happened at the start of today’s session. With the move to 1456.13, the market completed yet another 5 wave sequence from the 1474.51 high.

 

The market would appear to be reaching a point of decision. I still expect the market to move higher, with a target of 1497. If the market fails to hold near this 1456 level, it could mean a move back to minimally 1448-1444, and possibly back to the 1426 support level.

 

 

 

Monday's Market 09/17/12

After reaching a new uptrend high of 1474.51 on Friday, the market pulled back, completing a 5 wave sequence to the downside at 1461.54. After moving higher into the close on Friday, the market continued to consolidate its gains at today’s open, dropping back to 1462. The market then spent the rest of the morning, and early afternoon, trading in a very narrow range. In the last several hours of trading, the market broke through that trading range to the downside, first moving to 1459, and then after a slight bounce, down to 1457.55. Once again, the market moved slightly higher into the close.

 

The market completed another 5 wave sequence from 1474.51 at 1457.55, meaning the rally could continue from this point. If the market can move above 1461.62, I would expect the market to continue higher, with my target remaining at 1497. The market could still consolidate further, but if it moves lower, I would expect only slightly lower lows from this point.

 

Longer term, I see this as wave 5 from 667, with my target at the moment being above 1560. Wave 4 from 667 terminated at 1267. The market completed wave 1 of 5 at 1438.74, with the market in the process of completing what appears to be an inverted corrective wave 2.

 

 

 

 

Friday's Market 09/14/12

The market continued in rally mode this morning, powering to another uptrend high at 1474.51. After that high, the market corrected, falling to 1461.54 near the close.

At 1474.51, the market completed a 5 wave sequence from Monday’s 1429 low, and the ensuing correction unfolded in a 5 wave sequence terminating at 1461.54.

 

The most likely scenario at the moment is that an inverted corrective wave 2 is unfolding from the 1438.74 high. Three waves of this corrective sequence appear to have formed, with my target for wave 4 being the 1497 level. Another corrective wave, probably only slightly longer than today’s 13 point correction should follow, and complete wave 5 of that inverted wave. After that the market should continue higher to near 1560.

 

Tuesday's Market 09/11/12

As expected, the market moved above 1430 this morning, and a fairly sharp rally ensued. This rally played out in a 5 wave sequence that lifted the market back to 1437.76. From that point, the market formed a 5 wave sequence to the downside, which brought the market back down to 1432.

Support remains at 1426, and then 1397-1387. If the market falls below 1432 at this point, I further correction may be at hand. My next upside target continues to be 1497.

 

Monday's Market 09/10/12

On Friday, the market completed a 5 wave sequence from 1396.56, at 1437.80. After opening slightly higher today, the market moved lower to 1435, and the rose to a new uptrend high at 1438.74. This completed another 5 wave sequence from the 1396.56 low, and most likely marked the end of the 5 wave sequence from 1467. After the new high, the market moved lower, dropping to 1435.54, and then tried to move higher, but stalled at 1437.48. Once the market dropped below 1435 once again, the selling increased, dropping the market to the low of the day at 1429. Today’s move lower unfolded in a series of 5 wave sequences with diminishing wave lengths, which generally means the end of that move is imminent.

 

It is quite possible that the move to 1429 completed the corrective move, and if the market can move above 1430, we should see a fairly sharp rally. If we see anything other than slightly lower lows, this correction could have further to go. Support is at 1426, and if that level doesn’t hold, 1387-1397 is the next level of support.

If the market can rally to new highs, the move to 1497 may be underway.

 

 

 

 

Weekend Outlook 09/09/12

The market started the week off to the downside, making a new short term low from the 1426 high at 1396.56. That proved to be the low for the week as the market rallied from that point on Tuesday, spent Wednesday consolidating, and then broke out to the upside on Thursday. The rally continued on Friday, although in more muted fashion, with the market closing out the week at 1437.80, the high for the week.

 

Tuesday’s 1396.56 low completed a 5 wave sequence from 1426, and wave 4 from 1267. The rally from 1397 unfolded in a 5 wave sequence, and could mark the completion of a 5 wave sequence from 1267.

 

I have been posting an alternate count from 667 on the weekly chart for the past week or so. My original count had the move from 667 to 1422 as a 5 wave sequence. The alternate count I have been posting, and the one that seems to be correct, has the move from 667 to 1422 as 3 waves of a 5 wave sequence. Wave 1 terminated at 956.23. Wave 2 was an inverted corrective wave that completed at 1074.77. The move from 1074.77 to 1422.38 was wave 3, and 1422.38 to 1266.74 completed wave 4, which currently puts us in wave 5 from 667.

The move that has most likely just completed, from1266.74 to 1437.80, was wave 1 of 5. Under this scenario, wave 3 should take the market to 1497, and wave 5 should complete above 1560.

Corrective waves are a bit difficult to forecast. It would not be surprising to see the market fall back to 1400, or below before moving higher. However, it is quite possible for wave 2 to be a complex corrective wave, which could substantially limit the move down, with 1426 being the first support level. After that, there is a cluster of support between 1387, and 1397.

 

 

 

Thursday's Market 09/06/12

After trading in a narrow range for the past two weeks, the market finally broke out today, moving sharply higher. From yesterday’s close near 1404, the market jumped quickly to 1420. After a minor pullback, the market rose above the previous 1426 uptrend high, and reached 1430. At that point the market traded in a tight range, moving higher to 1431, before pulling back to 1428. The SPX then moved higher into the close, closing at the high of the day at 1432.11.

 

When the market hit 1396 on Tuesday, I said if the market was going to rally, it would from rally from that point. 1396 marked the end of a 5 wave sequence from the previous uptrend high of 1426. From 1396, the market formed wave 1 of the current sequence, reaching 1409. By the end of the day yesterday, the market completed a 5 wave corrective sequence, setting the stage for today’s rally. The opening move to 1420 appears to be wave 3 of the sequence, which was followed by an inverted corrective wave 4, which ended at 1428.33. The market should now complete wave 5 between 1446 and 1466.

 

When this wave completes, it should finish a 5 wave sequence from the 1267 low. While this would complete a sequence, I think the market will continue higher after undergoing a correction. The next wave could carry to 1497.

While I think the current wave will continue to 1446-1466, a move below 1428 would probably mean the current move is over, and the 5 wave sequence from 1267 has completed.

 

 

Wednesday's Market 09/05/12

The market again traded in a narrow range today. After a mixed open, the SPX found itself moving lower, falling to 1401 within the first half hour. The market staged a rally from there, moving sharply up to 1409 before stalling out. The market dropped to 1403, before recovering to 1407. Another move lower found the index at 1401 once again, before moving higher into the close. After moving back to 1405, the market dropped back near 1403 towards the close.

 

The move lower this morning completed another 5 wave sequence from yesterday’s 1409 high, with the following rally to 1408 also completing a 5 wave sequence from the low. The remainder of the morning and early afternoon were spent forming a rather complex wave back down to 1401.38.

 

My short term outlook remains unchanged. Yesterday the market completed a 5 wave sequence from 1426, and wave 4 from the 1267 low. The market would then currently be in wave 5, which could terminate anywhere from current levels, up to 1466. 1395 is still the level to watch on the downside. A break through this level would most likely mean wave 5 from 1267 has completed, and a more protracted correction is underway. I would still expect the market to move higher.

 

 

 

 

Tuesday's Market 09/04/12

I apologize for the lack of posts recently. I have been attending to a family emergency, and have not had the time to update.

I will start with today’s market, and try to get up to date. The market started to the downside this morning, opening lower, and then continuing lower to 1399.06. This completed a 5 wave sequence from Friday’s 1413 high. After a brief bounce the market continued down to 1398, and then 1396.56. This appears to have completed another 5 wave sequence from the 1413 high. At that point the market started to rally, slowly at first, and then gaining steam towards the close. After making it into positive territory for the day at 1409, the market slipped slightly into the close, dropping back to 1405.

 

Just to remind everyone of my current count, I see the 1426 high as wave 4 of an inverted corrective wave 4 from the 1266 low. For this scenario to play out, wave 5 of that inverted corrective wave should terminate above 1395, with wave 5 from 1266 to follow. From the 1426 high, the market has now made three moves below 1400, but has remained above 1395 while making slightly lower lows each time. This now appears to complete a 5 wave sequence from 1426, with the market now poised to move higher for wave 5. It is possible for this wave to terminate below 1426, with the upper limit being 1466.

 

There is also a possible count from 667 that would allow for this rally to continue, which at this point I think it will. I will try to give a more detailed analysis of that possibility over the next couple of days.

At this point, if the market falls below 1395, I would expect a further correction, but I believe the market will stay above 1266.