Tuesday's Market 08/14/12

It was another opening gap to the upside this morning, with the market moving above 1410 early on. This was another new uptrend high, and it would also prove to be the high for the day. After dropping back to 1405, the market tried to rally once more, but this rally peaked at 1409.53. The market sold off for most of the rest of the day, with only a slight pause at 1405. This took the market back to 1400 before the market rallied back to near 1404 at the close.

In my weekend update I said I was looking for an initial move to 1410-1414. Although I was a day late, and the wave did not form exactly as I thought, that is the range the market hit today. I would say a 5 wave sequence terminated this morning at 1309.53, and then another sequence to the downside completed at 1400.60. I still see this as the beginning of wave 5 to the upside from 1267. If this plays out, the next target should be 1418-1420.

There is a possible count that makes today’s 1409.53 high the peak of a wave 5 from 1354.65. If this turns out to be the case, I would expect this corrective wave to terminate either near 1395, or 1385-1380. This would possibly change the projection of wave 5 from 1267 to 1426, instead of 1497.