It is beginning to sound like a broken record; “Another
record setting day on Wall Street. But it was, as the SPX hit another all-time
high. I think the markets are ready for a pause here, before resuming the
uptrend.
The SPX gapped higher again today, reaching a
fresh high at 1623.74 before pulling back. The pullback was pretty steep, but
reversed course after closing the opening gap. From there it was more of the
same, as the SPX continued higher throughout the day, with only minor
pullbacks. After hitting 1626.03, it did pull back into the close.
The SPX formed an inverted corrective wave from
yesterday afternoon’s 1619.77 high, and then completed a 5 wave sequence from
1612.85 at 1623.74. This appears to be the end of Wave 3 from 1581.28. The sharp
pullback this morning was then Wave 4, and Wave 5 completed at 1624.23. The market was not quite
done, however, as it completed a larger degree sequence from 1581.28 at
1626.03. This appears to be the end of the wave from 1581, and most likely Wave
3 from 1074.77. I would expect a pullback at this point, with support at 1621,
and then 1609. I would expect that to be the end of Wave 4, which should be followed
by one more move higher before a more substantial correction occurs.
Normally with this wave structure, a move below
the previous wave 4 (1623.90), signals the top of the wave has occurred. If the
SPX falls below 1616.64 I would be fairly certain that the top is in. If the
SPX rise above 1626.03, we would most likely see another sequence develop from
the 1581.28 low.
Thank you.
No comments:
Post a Comment