The market opened sharply higher on Friday, rising to 1384 before running into any resistance. It appears waves 1, 2, and 3 of a 5 wave sequence were completed on Thursday, with Friday’s opening surge the result of an inverted wave 4. This wave terminated at 1381, allowing wave 5 to carry the market to 1387.
From there the market dropped slightly to 1385, before trying to rally once again. This attempt fell short of the 1387 high, and the market turned lower, gaining downward momentum through the afternoon. A 5 wave sequence from 1387 was completed at 1380, and after rising a few points, quickly fell below 1380, starting another sequence down. It appears to us that another 5 wave sequence from 1387 was completed at 1378, which sets the stage for a rally on Monday.
1378 most likely marks the end of a corrective sequence from 1387, and completes wave 2 from the 1370 low. We still view this as wave 5 from the 1357 low. This should carry us to 1396, at which point we can resume the downward move from 1422.
We would expect the current wave to hit 1391, 1385, and then 1396 to complete this sequence. 1370 is the level to watch on the downside, with a move below that signaling the continuation from 1422 is underway.
No comments:
Post a Comment