Monday's Market 04/15/2013

The first part of today’s move to the downside was expected, the second quite unexpected.

The market gapped lower at the open today, falling to 1578.97, just as I had mentioned this weekend. After making several slightly lower lows to 1575.31 the market attempted to rally. At this point I had expected the market to resume its uptrend, but it was quite the opposite that actually happened. After breaking through the previous low, the SPX fell precipitously, dropping to throughout the day, and closing on the low at 1552.58.

It looks like the SPX has completed a 5 Wave sequence from 1597.35 at this point. This calls into question my count from the 1538.57 low. The count rests on whether the move from 1540.29 to 1597.35 consisted of two 5 Wave sequences, or one. There is a count that shows it completing two sequences, and a 5 Wave sequence from 1538.57. That would make 1597.35 the termination point of Wave 3 from the 666.79 low, and today’s move lower as most likely Wave 3. Another move higher to the 1600 area would then complete the sequence.

If that move consisted of one wave, it would make 1597.35 Wave 3 from 1538.57, and this Wave 4. Wave 5 would then project much higher than 1600, and complete Wave 3 from 666.79. This would then be followed by Waves 4, and 5.

One of the reasons I have rejected the 1540.29 to 1597.35 move as one sequence up until this point has been the high target that it would lead to. At this point I will have to keep that option open.

I would look for a move above 1559 to signal another move to the upside, with a target near 1600.

If the SPX should fall below 1538.57, a 5 Wave sequence from 666.79 has most likely completed.

Thank you.