Thursday, May 23, 2013

Thursday's Market 05/23/2013


As strange as it sounds, the SPX did NOT make an all-time high today.  


The SPX gapped lower this morning, and within minutes the index had fallen to 1635.53. From there the SPX bounced to 1647, and after a small pullback, continued higher to 1654. The index then fell back to 1645, before heading higher to 1655.50, thus closing the opening gap. After that the SPX drifted lower into the close, dropping to 1648.82.

In yesterday’s post I indicated the market may move lower, giving a target of 1641. This would have completed a 5 wave sequence from the 1687.18 high as 1687.18-1672.96-1660.80-1648.86-1655.43-1641. Today’s lower opening exceeded the lower limit for this count, which most likely means that today’s 1635.53 low only completed wave 3 of the sequence. This was confirmed as the move from 1660.80 completed a 5 wave sequence at that low. This was followed by a 5 wave sequence higher to 1655.50, which should be wave 4 of the sequence. If this count is correct, wave 5 of this sequence should complete between 1632 and 1623. This should in turn complete Wave 4 from 1074.77, and set the stage for one more move to new highs before a larger correction develops.

So, for the short term, I am expecting a move lower to 1632-1623, followed by a move to new highs. If the SPX moves above 1661 from this point, I would expect the market to continue higher to new high territory.

Thank you.









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