The market opened sharply lower today, in what appears to be the continuation of the correction from 1422. Within the first hour the SPX hit 1358.90, completing a 5 wave sequence from 1387. From that low the market spent the rest of the day trying to regain its losses, beginning with an initial rise to 1363.
By 1:00PM, the market had rallied to 1376. This completed a 5 wave sequence from the day’s low, meaning the market would head lower once again. It did, dropping to 1362, but holding above the low of the day. Another rally ensued, making it first to 1367, and then after a small move down, to 1368. This completed another 5 wave sequence from the day’s low of 1359. The market dipped heading into the close, dropping back to 1366, before rallying back close to the day’s high right before the close.
As we said, today’s drop to 1359 completed a 5 wave sequence from 1387, and also completed a sequence from 1393. It appears that this will be the continuation of the move down from 1422, of which this would be wave 3. A move below 1357.38 would confirm this, and probably mean some more sharp moves to the downside. A move back above 1368.26 would mean another 5 wave sequence still needs to unfold from the 1359 low from today.
Interestingly, the market held just slightly above its previous 1357.38 low, leaving open the possibility that the correction from that level is not yet over.
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