In my Weekend Outlook I said I expected the market
to decline today, and gave 1563.50, and 1557.40 as likely termination points
for the decline. After a slight move higher at the open, the SPX declined to
1563.77, and after a failed rally attempt wound its way down to 1558.47.
The market did open slightly lower, dropping below
1568 before rising just above Thursday’s high of 1570.28 to 1570.57. This then
completed a 5 Wave sequence from 1551.90, with that sequence being
1551.90-1564.07-1561.08-1568.30-1564.42-1570.57. This yields a correlation
coefficient of .997 for the points (1551.90, 1564.07), (1561.08, 1568.30), and (1564.42,
1570.57).
From that high, the market fell fairly swiftly,
first completing a minor sequence with
1570.57-1569.88-1569.79-1568.02-1568.62-1564.89. This gave a model value of
.999. That wave then grew into a larger sequence with
1570.57-1564.89-1565.48-1563.84-1564.53-1563.77, and a model value of .992.
This low of 1563.77 was very close to my estimate of 1563.50 as a support
level. The market did rally, rising to 1566.87, before falling again.
Once again, the previous low turned into Wave 1 of
a larger sequence, and the market formed a wave of
1570.57-1563.77-1566.87-1561.87-1562.50-1559.46, which had a model value of
.999.
After reaching the 1559 low, the market underwent
a more sustained rally attempt. This 5 Wave sequence went
1559.46-1561.10-1559.61-1562.39-1559.87-1564.07 with a model value of .994.
The SPX then went on to complete one more 5 Wave
sequence from the morning’s high of 1570.57. With the drop to 1559.46 as Wave
1, and the rise to 1564.07 as Wave 2, the market completed Wave 3 of this sequence
at 1558.73. This wave broke down as 1564.07-1562.22-1561.85-1560.24-1560.44-1558.73,
and a model value of .997. A rise to 1560.43 completed Wave 4, and a final drop
to 1558.47 completed Wave 5.
This low again was close to my 1557.40 projection,
which I stated was my preferred target over the weekend. There is a possible
count that would accommodate one more move lower, actually to the 1557 level,
but it appears that 1558.47 will be the low for this wave. Any drop
significantly below 1557 would most likely mean my count is incorrect.
With what appears to be Wave 4 from 1546.22 now
completed, it is possible to project a target for Wave 5. The sequence
1546.22-1563.95-1551.90-1557.70-1558.47-1578.24 would give a model correlation
of 1, and therefore 1578.24 is my target for Wave 5. Another correction can be
expected from that point.
No comments:
Post a Comment