As expected, the market opened higher today, moving quickly above 1400, and then to 1402. After a minor pullback, the market climbed to 1404, and then started to move lower. This pullback found support back near 1402. From that point, the rally continued this time taking the market to 1406. After another small pullback the market moved to the day’s high of 1407.14, which also marked a new uptrend high. The market then pulled back through the afternoon, bringing the market back near 1400 just before the close.
The move higher this morning was expected, but took the market slightly above the level I was looking for. This would seem to invalidate the count I was looking at. The market completed a 5 wave sequence from 1354.65 to 1394.16, a sequence from 1394.16 to 1388.69, which was then followed by a 5 wave sequence from 1388.69 to 1399.63. The move down from that high to yesterday afternoon’s 1393.82 low also completed a 5 wave sequence. Today the market completed a 5 wave sequence from that low to 1407.14, and another into this afternoon’s low.
The five 5 wave sequences from 1394.16 meet the criteria of an inverted corrective wave, which makes it most likely that wave 1 from 1354.65 terminated at 1394.16, which was then followed by a 5 wave corrective sequence that terminated this afternoon at 1400.85. This is best seen on the 15 minute chart. If this count proves to be correct, the market should now move higher into my next target of 1435-1475. This move could be fairly quick, with only very minor pullbacks along the way.
Support is at 1387-1397, and then 1376. Resistance is at 1406, and then 1426.
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