The market started the week off to the downside, making a new short term low from the 1426 high at 1396.56. That proved to be the low for the week as the market rallied from that point on Tuesday, spent Wednesday consolidating, and then broke out to the upside on Thursday. The rally continued on Friday, although in more muted fashion, with the market closing out the week at 1437.80, the high for the week.
Tuesday’s 1396.56 low completed a 5 wave sequence from 1426, and wave 4 from 1267. The rally from 1397 unfolded in a 5 wave sequence, and could mark the completion of a 5 wave sequence from 1267.
I have been posting an alternate count from 667 on the weekly chart for the past week or so. My original count had the move from 667 to 1422 as a 5 wave sequence. The alternate count I have been posting, and the one that seems to be correct, has the move from 667 to 1422 as 3 waves of a 5 wave sequence. Wave 1 terminated at 956.23. Wave 2 was an inverted corrective wave that completed at 1074.77. The move from 1074.77 to 1422.38 was wave 3, and 1422.38 to 1266.74 completed wave 4, which currently puts us in wave 5 from 667.
The move that has most likely just completed, from1266.74 to 1437.80, was wave 1 of 5. Under this scenario, wave 3 should take the market to 1497, and wave 5 should complete above 1560.
Corrective waves are a bit difficult to forecast. It would not be surprising to see the market fall back to 1400, or below before moving higher. However, it is quite possible for wave 2 to be a complex corrective wave, which could substantially limit the move down, with 1426 being the first support level. After that, there is a cluster of support between 1387, and 1397.
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