As promised, I’ve put together some support/resistance charts, and worked on some projections for the next waves.
The first chart shows the support/resistance lines generated by the wave from 1422 to 1267. Due to the structure of the wave, it has generated quite a few lines. There are several interesting features to this collection of support/resistance lines. There is a large cluster of lines between 1268, and 1338, and then a large gap above 1338. This gap extends to 1387, where another cluster of lines appear. This suggests once again that the 1338 level is an important resistance level and that if the market clears this level, it should encounter very little resistance until it reaches 1387. This cluster above 1387 will become important again as the next wave sequence is projected.
This next chart gives the support/resistance lines that will be generated assuming the move from 1267 ends at 1337. These may change slightly once the exact termination point is known. This chart shows a large gap in support between 1316, and 1290, once again indicating that if the market breaks below 1316, it could head back down near 1290. It is important to note that other lines will be generated by wave 5, of 5 from 1267, meaning that a correction from a wave 5 high near 1337 may terminate before reaching any of these levels.
On the weekly chart, I have added projections given the sub-wave structure from 667 to 1422. If we have seen the low of the correction from 1422, and the market is moving higher, I see 1426, and 1497, as the two most likely stopping with one of those levels becoming the termination point of wave 3.
Lastly, I have made a next wave projection assuming that wave 1 will terminate near 1337. This projection puts wave 3 from 1267 at 1393. Going back to the first chart, you can see that 1393 falls right in the middle of the resistance cluster found between 1387, and 1398.
I have made several assumptions in putting these charts together, mainly regarding the termination point of the current wave. I made those assumptions in order to show the next possible scenario. If the current wave ends near 1333-1337, we can expect, after some sort of correction, for the market to move up to 1393. After a wave 4 correction the market should then move higher to either 1426, or 1497.
Steve, sharp reversal was an understatement today!
ReplyDeleteIs this last move to SPX 1308, the consolidation needed to move to the higher level on this wave?, or was today the signal for burnt toast? Seemed like flushing out the weak hands on "sell the news". I can't make heads or tails, so I look forward to tonight's summary and your next expectations based against today's sudden reversal and closing numbers
Vinnie.
DeleteThe market did break down rather quickly. I think we move a little lower from here, but longer term I am still bullish.
Steve