Thursday, April 25, 2013

Thursday's Market 04/25/2013


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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