The market dropped slightly at the open, falling to 1383 before rebounding to near 1387. The choppiness from yesterday carried over into today, as the market soon fell to 1381. A rally above 1387 was followed by another pullback below 1380. The market rallied one last time to nearly 1385, before falling to the low of the day below 1379 near the close.
It looks like I had the wave structure slightly wrong yesterday. The market did make two moves to the downside as I suggested it might, but it did not carry as low as I thought it might. It now looks like wave 5 from 1391.74 occurred at this morning’s low, and then a larger degree sequence completed at the low near the end of the day.
This wave has formed in such a way, with waves of decreasing length, that the resistance lines are clustered from today’s low, to about 1383.70. The next resistance level would be at 1393, and then 1426. A move above that level, and if the market can hold above that level, would probably result in a move to new uptrend highs.
While my model would allow for very slightly lower lows, a break substantially below, by several points, would most likely mean a rather large move to the downside. Another move to the downside would probably have to result in a complex corrective wave 2, meaning the market could move much lower, perhaps below the 1368 level I am looking at to keep 1497 as the next target.
At the moment I still see the market moving higher. My targets remain either 1426, or 1497. If this level holds, 1497 would be the target.
Resistance is between current levels, and 1383.70, 1393, and 1426. Support is at 1376, 1367, and 1352.
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