On Thursday the SPX completed Wave 5 of a move from the 1392 low, and then moved above it, indicating another 5 wave sequence up. On Friday that analysis was confirmed with a strong opening. When the SPX hit 1409, it completed Wave 3. From there the market turned down, spent the next hour working on Wave 4, which terminated at 1401. From there the market turned higher once again, spending most of the remainder of the day forming a detailed Wave 5. This wave made stops at 1409, 1407, 1410, 1409, and finally at 1410.89, which completed that wave. The market then turned lower into the close, hitting a low of 1406.86, before moving up slightly to close at 1408.47.
We do not discern a 5 wave sequence from the 1410.89 high, therefore we would expect the market to open lower on Monday. From there will be watching that 1411 level, a move above that signaling another 5 wave sequence to the upside would be in order. Our belief at the moment is that 1410.89 is the high of a correction from the 1392 low. We now expect the market to work its way lower, now in a wave 3 from the 1419 high. That would be confirmed with a move below the 1387 low.
Longer term we still view 1419 as the high from 667. We are looking for a major 5 wave sequence to form from there.
Hi Steven,
ReplyDeleteYou say:
Longer term we still view 1419 as the high from 667. We are looking for a major 5 wave sequence to form from there.
Is the major 5 wave sequence you speak of to the downside?
Is there some approximate target? Can the move go below 1075?
Thanks,
Aaron
Hi Aaron,
ReplyDeleteYes, we expect a 5 wave sequence to the downside. Our model does not give accurate projections this early in the formation of a wave, so right now we don't have a target. A best guess would be 1300 minimum, and perhaps lower.
Since we view this as a corrective wave from the 667 low, we could possibly fall below 1075, but we don't see that as a likely scenario at the moment.
Thanks,
Steve