After trading in a narrow range for the past two weeks, the market finally broke out today, moving sharply higher. From yesterday’s close near 1404, the market jumped quickly to 1420. After a minor pullback, the market rose above the previous 1426 uptrend high, and reached 1430. At that point the market traded in a tight range, moving higher to 1431, before pulling back to 1428. The SPX then moved higher into the close, closing at the high of the day at 1432.11.
When the market hit 1396 on Tuesday, I said if the market was going to rally, it would from rally from that point. 1396 marked the end of a 5 wave sequence from the previous uptrend high of 1426. From 1396, the market formed wave 1 of the current sequence, reaching 1409. By the end of the day yesterday, the market completed a 5 wave corrective sequence, setting the stage for today’s rally. The opening move to 1420 appears to be wave 3 of the sequence, which was followed by an inverted corrective wave 4, which ended at 1428.33. The market should now complete wave 5 between 1446 and 1466.
When this wave completes, it should finish a 5 wave sequence from the 1267 low. While this would complete a sequence, I think the market will continue higher after undergoing a correction. The next wave could carry to 1497.
While I think the current wave will continue to 1446-1466, a move below 1428 would probably mean the current move is over, and the 5 wave sequence from 1267 has completed.
Thanks for your analysis as always. Just wondering when you say that "a move below 1428 would probably mean the current move is over, and the 5 wave sequence from 1267 has completed", are you then looking for a substantial correction and if you are, what will be the initial targets. There are a lot of targets greater than your 1446-1466 target. What are the chances of the market melting up way beyond your 1466 target. Thanks again.
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