The market opened higher today, moving above the 1356.70 level I thought would signal a resumption of the uptrend. Very quickly, however, the market turned lower, moving below the 1351.83 level I thought would result in a further correction. After moving above 1361 after the open, the market dropped back to 1345. After hitting 1345, the market rebounded, moving back above the 1357-1358 resistance level, and after dropping back to test it, moved higher once again. The market moved above 1365 for the high of the day, before falling slightly into the close.
The move higher from 1325 has turned out to be, like every other move lately, more complicated than I had thought. It now appears that wave 1 terminated at 1333.91, and was then followed by an inverted corrective wave 2 that lifted the market to 1357.7, before ending at 1348.51. Monday’s move to 1357.26, and drop to 1351.38 completed waves 3, and 4. Waves 1, and 2 of wave 5 completed at the close on Monday, and Tuesday’s opening move to 1361.32 completed waves 3, 4, and 5, and the 5 wave sequence from 1325.
The move down from that high was a 5 wave sequence, and the rally to 1365 contained a 5 wave sequence which terminated at 1360.78, which became wave 1 of a larger degree sequence which ended at 1365.36. This sequence contains waves of diminishing lengths, which usually indicates a reversal.
I still see this as part of a wave sequence that will take the market to 1393, but it appears we may still be undergoing a corrective sequence that will have to be completed before we resume the uptrend. This could take the form of a semi-inverted corrective wave that should take the market back between 1345, and 1361, and after a short rebound holding below 1361, should terminate somewhere below 1345. The other possibility is an inverted corrective wave, which would mean a pullback holding above 1345, and then a move back above 1365, followed by another small pullback.
Short term support is at 1357-1358, 1337, and then 1323-1326. Resistance is at 1367, and then 1387-1397. A move up to the 1387-1397 resistance level should mean either wave 3, or wave 5 from 1267 has completed, with a corrective wave to follow.
Steven, it's out of my surprise to see you suddenly change your view that 1393 indicates a termination of rebound from 1267, as you said it could be a wave 5 from 1267. So you see SPX is gonna fall back after hitting 1387-1397. Do you think the corrective wave after would take us below 1267 or in which level? To me, there's something alert me. DJT is not following DJI to approach new rebound high, which according to Dow theory it would be a bearish signal. What do you think?
ReplyDeleteHi Nick,
DeleteIt is a bit of a change, but at the moment I don't see it affecting any of my projections. I see this as a wave 1 of another sequence up. I posted an update to my count that should clarify things. I am familiar with Dow Theory, but I don't really follow it. Again, at the moment, I don't see this as the start of a move below 1267.
Thanks,
Steve