We were looking for a lower open, having closed on Tuesday at a wave 5 termination point, and we got one. The market gapped down at the open, and continued down in the first couple of minutes to the 1400 level, before finding some temporary support. After rising several points to 1403, the market moved to new lows for the day. At 1394 a 5 wave sequence from 1422 and a corrective sequence was in order.
The SPX completed the first wave of this sequence just shy of 1399, and then headed south once again. A new intra-day low at 1394.09 formed wave 2, the move to a new low indicating an inverted, or semi-inverted corrective wave was in progress. A bounce to 1398 and the subsequent drop to 1396 were waves 3 and four of the sequence. Rallying once again into the close, the market topped at 1401.39, then fading to close at 1398.96.
We believe the final rally was the fifth wave of the semi-inverted corrective sequence from the 1394.33 low. This would indicate another down move on Thursday, which would most likely be wave 3 of the move down from 1422. We are still anticipating a move below the 1391 level, which would confirm the current downtrend. Interestingly, the bottom of this move is almost identical to the bottoms at 1391, and 1387. In both cases we thought we had formed a semi-inverted corrective wave from those bottoms, and in both cases we were wrong. We believe we are correct in the current count, but given the circumstances will proceed with caution. A move above 1401 would mean the corrective wave has not yet been completed, but we still believe this to be a corrective wave.
No comments:
Post a Comment