“If I have ever made any valuable discoveries, it has been owing more to patient attention, than to any other talent.”
Isaac Newton
The lack of movement in the market the last several days certainly has tried the patience of investors. However this seeming inaction reminds us that the market works at its own pace, and not that of investors. The market has been telling us that it has not as of yet reached its target. As the market meanders, we believe it is also laying the groundwork for a potential high.
We set a target several days ago of a high occurring in the S&P500 above the 1378.79 level. Our target remains intact, with the action of the last two days being part of one last push higher. The 1352.28 low that occurred last Thursday is the point we are using for the termination of Wave 2. If we use the subsequent high of 1371.94 as Wave 3, and the following low of 1354.92 as Wave 4, we can extrapolate a target for Wave 5 between current levels and 1382.5. Since our target range for Wave 5 was between 1378.79 and 1421.75, we can now narrow our target to between 1378.79 and 1382.5. This would satisfy our model for both waves. Once we achieve our target levels, a move back below 1352.28 would confirm a corrective wave sequence has begun.
We hope our “patient attention” will pay dividends shortly.
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