Thursday's Market 03/28/2013

The SPX opened higher today, reaching 1565.09, falling just short of my 1565.50 upper limit that would end this move from 1538.57. That limit was derived from the highest price that would complete a 5 Wave sequence from the aforementioned low, given the pattern of 5 Wave sequences completed thus far. A move above that point would signal a different wave structure was underway, and a structure indicating higher prices was forming. After pulling back to 1561.08, the market once again moved higher, this time surpassing my 1565.50 limit, and continuing on to 1568.30. Another pullback followed, this time taking the index to 1564.42, before the market rose for a final time. This rise was more sustained, and topped out at 1570.28 just before the close.

 

I indicated yesterday that I had expected a lower opening, which was based on the market having completed a 5 Wave sequence at 1567.04. The dip yesterday from that high, the higher open today, and the first decline this morning to 1561.08 formed a semi-inverted corrective wave from that high. From 1561.08 the market traced out a 5 Wave sequence to 1568.30, which included an inverted corrective wave. Following the 5 Wave sequence decline to 1564.42, the market formed one final 5 Wave sequence to the day’s high of 1570.28.

 

Looking at the 15 Minute chart, the larger formation from the 1538.57 low is becoming clearer. It is now evident that the market is still in Wave 3 from the 667 low. The next possible 5 Wave sequence that may form is from the 1546.22 low. It appears that 3 Waves have formed up to the 1570.28 high, leaving Waves 4, and 5. From 1570 we are likely to see a pullback to 1557, a rise to 1574, followed by another pullback to 1548.

I will elaborate on this count over the weekend.

Thank you.