In yesterday’s post I said a 5 Wave sequence from
1563.03 could complete something like 1587-1585-1591. Today it did complete as
1586.33-1585.55-1590.47. But the market was not quite done, as it then also completed
a sequence from the 1536.03 low.
It was another gap up opening for the market, with
the SPX reaching 1585 earl on. The market then pulled back to 1581 before
continuing the move higher. And move higher it did, hitting 1586.33, pulling
back slightly to 1585.55, and then reaching 1590.47. After dipping less than
three points, the SPX kept rising until it hit 1592.64. A sell-off took hold
from there, with the SPX falling to 1583 before moving slightly higher into the
close.
The initial move today completed a 5 Wave sequence
from 1563.03. As I mentioned a couple of days ago, it was then possible that a
complex corrective wave would form from the 1579.58 high. The SPX did just
that, completing that corrective wave at 1587.85
(1579.58-1563.03-1590.47-1588.77-1590.21-1587.85). Following that a sequence
completed from the 1536.03 low as 1536.03-1579.58-1587.85-1591.76-1590.89-1592.64.The
sell-off to 1583.23 then completed a sequence from that high, right at a
support level indicated by the previous wave.
With a 5 Wave sequence completed from the 1536.03,
the question is now whether the market will resume the downtrend from 1597. If
this is not the end of the current move, we are likely very close to the end.
At the moment I will remain neutral as to the direction of the next move, but
will be looking for a specific scenario that would indicate the end of this
move.
The next resistance level is 1595-1598. If the SPX
moves into that level, pulls back, and then makes another higher high, it would
complete another sequence from 1536 as a rising wedge. A breakout from that wedge
would indicate the next move to the downside is underway.
As mentioned, the next resistance is 1595-1598,
with the next support level at 1566.
Thank you.
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