I was expecting a continuation of the pullback
from Friday’s record high, but that did not materialize. Instead the market
moved higher and recorded yet another all-time high. This may have put the
market in a precarious situation, however, as I will explain in a minute.
The SPX opened higher to 1617 before pulling back
to 1614. Another move higher took the index above 1618, and again was followed
by a pullback, this time to 1615. The SPX then moved higher into the afternoon,
reaching a new high at 1619.77. From there the SPX moved lower, dropping to
1616.68.
It appears I missed a wave for the inverted
corrective wave yesterday afternoon, and the 5 Wave sequence from 1618.46 at
1612.85. The move to the new record high of 1619.77 completed another 5 Wave
sequence. From the 1581.28 low, the market has now completed a sequence to
1618.46, a sequence to 1581.28, and a sequence to 1619.77. Since I was looking
for Waves 3, 4, and 5 from 1074.77, we may have
seen the completion of that wave today. It has been very difficult to call a
top in this market, but I can now set some parameters to watch. If the SPX
moves below 1612.85, I would say a 5 Wave sequence from 1074.77 has completed,
and we are likely to see a correction. If the SPX moves above 1619.77, it is
possible to then complete a 5 Wave sequence from the 1581.28 low, which would
most likely mean the end of Wave 3 from 1074.77. A small pullback would then be
expected, followed by one more move higher.
Thank you.
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