With the SPX completing Wave 4 yesterday afternoon, we were looking for a move higher today. The initial move up from those lows yesterday afternoon turned out to be the first wave of this move up. The market did move higher initially, hitting 1396.61 in the first half hour, before turning lower. There was some choppiness during the morning, as the market formed an inverted corrective wave from that initial move, completing that at 1393.74. From there the market turned higher once again, completing Wave 3 at 1398.76, just shy of the Wave 3 high of 1399.42. A short pullback to 1395.37 formed Wave 4. From there we were looking for a projected move to the 1400.5-1402.5 level for Wave 5. During the midday hours the SPX hit 1402.35, completing Wave 5.
From that high we moved lower once again to 1398.82. This completed a 5 wave sequence which would either become Wave 2, Wave 1 of an inverted corrective wave, or possibly Wave 1 of a larger corrective wave. From that point the market moved higher again into the close, finishing the day at 1402.60. The move above the Wave 1 high of 1402.35 indicates 1398.82 would be the low of this minor correction, and we would be looking for another move higher. The move today puts us well within striking distance of our target range.
In the very near term we are in Wave 2 or 3 of the move from 1389.97. This wave should complete all higher degree waves from the 666 low.
In the short term we are in Wave 5 of the rally from 1340.03. Our target for this wave is 1414-1429.
Medium term we are in Wave 5 of the 1074.77 low. This wave should terminate between 1398 and 1428.
Long term, again, we are in Wave 5 from the 666.79 lows of March 2009. Our target for this wave has been 1378 to 1421.
Looking at the market from the 1340.03 low, we are in Wave 5, which we project to terminate between 1414.45 -1429.92. As we move deeper into this wave, we should be able to narrow our projection. Our projection for the top from the March 2009 low remains 1378.79-1421.75, exactly where we sit now, the current wave should terminate in the range of 1414.45-1421.75.
Our wave count from the 1074.77 low has been troublesome since the initial reaction to the 1378.04 high. That reaction was not as we anticipated, and we have been unable to identify a future scenario that would satisfy our model given our current wave counts. That, plus the fact that the current wave, and the 5 wave sequence from the 666 low, are both converging on the same point, makes it obvious to us that we have erred, either missing a wave, or misinterpreting a wave. We have identified a wave structure from the 1074.77 low, which would also project into the same level. The range for that count would be 1398-1428, exactly what we would expect. At this point that seems a more reasonable count. We are continuing to re-evaluate that wave to understand the minor waves, and the complete structure of the wave.
However, we are still quite convinced that we in the range of a major top, with the completion of a 5 wave structure from the March 2009 low of 666.79 imminent. All wave degrees are converging on the same point, giving us confidence on this viewpoint. With only minor waves left to complete, it looks like this major wave will top between 1414 and 1421. From there we can expect a major move down to begin the next wave 2.
There is a major Bradley model turn date tomorrow, 3/16. Those dates have been surprisingly accurate in the past. Also, Greece's impending default after the 20th should be a market moving event (e.g. leave euro, bank holiday). Finally, there are Fibonacci reasons for this major high to have the S&P 500 somewhere between the 1420's and 1440's. This has to do with relationships between what seem to be Elliott sub-waves 1, 3 and our current wave 5.
ReplyDeletePaul,
ReplyDeleteYou have been pointing to this date for some time, and it looks as though you may very well be right. 1420 seems to be the point at which all of my waves are converging. We'll see what happens.
Thanks,
Steve