This morning the market opened slightly higher, moving up to the 1358 resistance line, and completing a 5 wave sequence from yesterday afternoon’s 1347 low. The market then pulled back to 1349, and then tried to rally. The rally failed to move above 1358, only making it to 1352 before moving lower again. Once the SPX moved below 1347, it headed straight down, barely pausing on its way to 1324.
Yesterday I mentioned some positive wave structures developing, with a move above 1362 meaning a resumption of the uptrend, and a drop below 1347 indicating a continuation of the corrective sequence from 1362, with support between 1326, and 1324.
The contracting wave structure I talked about yesterday theoretically would have meant a break of 1347 would result in ever smaller waves, eventually leading to a move higher. The market circumvented this structure by forming an inverted corrective wave from 1347. This inverted corrective wave also contained an inverted corrective wave, resulting in the steep downward move we saw today. The decline did, however, end today right within the 1326-1323 support area I have identified, which completed a rather complex 5 wave sequence from 1362. This unfortunately only completes 3 waves from 1363, with another wave down to come.
It seems most likely at this point that the 5 wave sequence from 1363 will itself contain an inverted corrective wave 2. From 1363, 1346 would be wave 1, 1362 would then become wave 1 of an inverted corrective wave from 1346. Today’s move would be wave 2 of that inverted corrective wave. Today’s 1324.41 low should be the low of this inverted corrective wave. Wave 3 should be a move higher, probably less than 15 points, a move down terminating above 1324, and another move higher, again probably less than 15 points. At that point we would see waves 3, 4, and 5 complete from 1363. Wave 5 could complete back near today’s levels, or continue down to the next support level at 1313.
Near term, a move above 1327.22 from today’s low would indicate the scenario I outlined above was occurring. If the market breaks 1324, the down move will continue, perhaps to the 1313 support level.
Longer term, I current count remains intact. At this point the market would need to break 1310 before invalidating the current count.
Thank you for your interest.
No comments:
Post a Comment