The market opened slightly higher, moving back over 1387, before moving back under 1385. The market then moved to a new uptrend high at 1391.74. This would appear to be the wave 5 of 3 high, and not Friday’s 1389.19. The market then pulled back, dropping to 1381, before rallying back to 1385.95. The rest of the day was spent in a narrow trading range between 1382, and 1386.
The market formed a clear 5 wave sequence from 1392 to 1381, very near the 1382 support level generated by the wave from 1329 to 1392. The sequence formed after that is a little less clear. It is very close to meeting my model’s criteria, but falls just short. This may be due to the closeness in price of the three peaks, or something else may be forming. If the market falls below 1381.37, I would expect to see another move lower to first 1377-1378, and then near the 1376 support level. If the market moves higher it is possible the market is in the beginning stages of a nested wave that could signal a powerful move.
While 1391 most likely was the completion of wave 3 from 1267, this corrective wave may be quite shallow. In fact, it is possible it has already ended. A breakout to the upside could mean the market is headed to 1497. This correction could carry down to around 1368, and still keep1497 the target. If it completes between 1350 and 1330, the target may move down to 1426.
Support is now at 1382, 1376, 1367, and 1352. Resistance is at 1393, and 1426.
On the chart I posted last Friday, I only showed the major waves, mostly due to the confusion trying to show each wave sometimes leads to. I’ve included a chart today that shows the entire move from 1329, with all waves labeled.
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