Thursday's Market 04/18/2013

In yesterday’s post I said the SPX had completed three 5 Wave sequences from 1597.35, 1552.58-1575.35-1543.69, and possibly a fourth sequence at 1555.15. I said that if the market moved down to 1535, it would complete a 5 Wave sequence from the high, and that I would then expect a rally. Late this afternoon the SPX hit a low of 1536.03.

The market opened slightly higher this morning, but did not exceed yesterday’s high. Soon the market continued to the downside, falling to 1541.40. The SPX then rallied to 1552, and then spent most of the remainder of the day trading within that range. By mid-afternoon the market started heading lower again, hitting the 1536.03 low, before rallying towards the close.

It does appear that Wave 4 from 1597.35 did complete yesterday afternoon at 1555.15. The market from there completed a 5 Wave sequence into today’s low, 1555.15-1541.40-1552.17-1539.46-1542.37-1536.03. This sequence terminated within the range target for Wave 5 from 1597. Therefore it is most likely that a sequence has completed at this point, and a rally should come next. A likely target for this correction should be around 1561. From there I would expect another move down near 1500.

Thank you.