It was another day, another record high for the
SPX.
The market opened higher today, rising to 1589.64.
After a small pullback the market continued higher, first hitting 1592.82, and
then 1597.07. The SPX then traded in a narrow range, less than four points, and
hit a new all-time high along the way.
Yesterday I said it was possible that Wave E
completed at 1581.28, and that a move above 1590.79 would confirm this. It looks like yesterday afternoon we saw Wave 1, followed by Wave A of an inverted corrective
wave near the end of the trading day. The opening move to 1589.64 then
completed Wave B, with Waves C, D, and E ending in a zig-zag
pattern. With this Wave 2 from the 1581.28 low was completed, and the next move to 1592.82
completed Wave 3. After a small pullback from Wave 4, the SPX then moved to 1597.07 to complete Wave 5.
This became Wave 1 of the next sequence, with Wave
2 being a semi-inverted corrective wave. As you can see, after a small pullback
from the 1597.07 high, the SPX moved above that level, and then pulled back
below the initial move lower from 1597. This formed Wave 2. Waves 3, 4, and 5
then completed within the narrow range trading that followed, with Wave 5
completing at 1598.60.
The SPX has now, once again, completed a 5 Wave
sequence right at the 1598-1602 resistance level I have been mentioning. With
1581.28 marking the end of Wave 2 from 1074.77, the sequence today may have formed
Wave 3, a small pullback could
form Wave 4, and one more try at the
1598-1602 level could complete Wave 5. Unless the SPX can break through that resistance
level, that would seem to be the likely outcome for this move. The SPX ended
the day right at the first support level, with the next support at 1591-1592. I
would expect a drop into this support level if this scenario plays out.
The waves at this point are difficult to discern,
and if the SPX should fall below the 1581.28 low, I would say a further
correction to 1530 is likely.
If the SPX is going to break through this
resistance level, tomorrow may be the day. After reaching 1598.60, the market
pulled back. Very short term; the SPX completed a 5 Wave sequence within the
first support zone. This sequence contained an overlapping wave structure, when
I would have expected non-overlapping waves if the pullback were to continue. This
is the setup for a wave A of an inverted corrective wave. This would result in
a powerful move above the resistance level, and lead to higher prices. This
would be the mechanism to finally break through this level.
A lot of maybe’s and could be’s , I know, but
until the SPX either moves above 1598-1602, or below 1581, there is a lot of
uncertainty.
Thank you.
Thank you
ReplyDelete