The rally continued today off Friday’s low,
closing the gap down opening. If the count I discussed in my Weekend Outlook is
correct, we should see the market rise higher here, before a pullback.
With the completion of a 5 Wave sequence off the
1540.269 low just before Friday’s close, it was not surprising to see the
market open slightly lower today. The market dropped to 1548.63 this morning,
before resuming Friday’s rally. The market rose to the 1552-1553 area, where it
encountered some resistance. After bouncing in a narrow range for a couple of
hours, the market finally cleared that level. Once it did, the rally resumed in
earnest. The market quickly rose to 1558.65, and after a small pullback,
reached 1562.79.
From Friday’s 1540.29 low, the market now appears
to have completed 3 Waves . Wave 1 completed at 1554.66, with the pullback to
1548.63 a second wave. The third wave most likely completed near today’s close
at either 1562.25, or 1562.79. If it completed at 1562.25, the very minor
pullback to 1561.97 could be a fourth wave. This would give a projection for
Wave 5 somewhere above 1572.
That would most likely be the completion of Wave 3
from 1538.57 low. This would fit very well with a projection of 1619 for Wave 5
from that low, as I discussed over the weekend. If the market pulls back at the
open, I would expect support near 1556. This would be about the same point drop
as the move from 1554.66 to 1548.63, and could mean the SPX is forming an
inverted corrective Wave 2 from 1554.66. Either way, the market should reach
1568-1572 to complete Wave 4.
Thank you.
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