We were looking for a slightly lower opening on Thursday, with a price of 1365-1363 completing a 5 wave corrective sequence from Wednesday’s 1375 high. From there we expected a move higher, with a move above 1375 signaling another 5 wave sequence up.
The lower opening never materialized, with the market moving higher at the opening. The low of 1367 was slightly higher than expected, but appears to be the termination point of that corrective sequence. The market did break through 1375, and another sequence was underway. The market paused momentarily at 1378, completing Wave 3 from the 1357 low. The wave sequence from that point was a 5 wave inverted corrective Wave 4. A slight drop to 1376 was followed by another short term high at 1383, and then rose again to 1387, after falling to 1382. One final small dip to 1384 completed the Wave 4 inverted correction. From there the market completed a 5 wave sequence terminating at 1388.13, which also completed a 5 wave sequence from 1357.
This 1388 high took out the 1387 Wave 2 high, which means 1357 was the termination of a 5 wave sequence from 1422 as we discussed yesterday.
Having now completed a 5 wave corrective sequence from that 1357 low, we can now look for the market to move lower once again. We are still looking for this move from 1422 to carry us into the low 1300’s, and perhaps lower. 1388 is now the level we are watching that would indicate the market will still move higher.
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