Yesterday we stated that despite the exceptional strength of Tuesday’s market, we felt there was still some upside potential, setting our target for Wave 3 between 1397.27 and 1401.54. After a flat open, the market moved steadily higher over the first hour until it hit 1399.42. After reaching our target range, the market turned lower as expected.
Over the next three hours the market moved to the downside, hitting a low of 1393.13, and finally completing a convoluted but none the less correct five wave sequence at 1395.39, forming wave 1 of the correction. After a minor rally to 1397.83, wave 3 terminated at 1390.50, and wave 5 at 1389.97, completing the shallow correction we spoke of yesterday. The market came off the lows into the close, ending the day at 1394.28.
The 5 wave sequence from 1399.42 to 1389.97 should be Wave 4, setting us up for a Wave 5 termination point between 1414.45 and 1429.92. A rather large range at the moment, but as the wave develops we should be able to narrow it down further. Should we break through the 1389.97 low, we would need to complete another 5 wave sequence, and revise our target.
From there we should see another move down near 1340 before making one last move back up to the 1420 level.
No comments:
Post a Comment