Tuesday, May 28, 2013

Tuesday's Market 05/28/2013

The market apparently put aside any bearish sentiments over the long holiday weekend, and began the week on its familiar bullish note.


After finishing last week with back to back gap down opens, it began this one with a gap up open. After initially moving up to 1668, the SPX climbed higher, with barely a pullback until it reached 1674.19. At that point it began to pullback, and continued to pullback, until it reached 1655.03. There the pullback ended, and the SPX rose to 1663 before the close.

It is now apparent that last Thursday’s 1635.53 low was the end of the correction from 1687.18. It appears that the SPX has been forming a nested inverted corrective wave structure since then. Wave 1 ended Thursday at 1655.50. Wave 2 of the 5 wave sequence ended today at 1655.03. Wave A of 2 ended Friday at 1636.88 and Wave B this morning at 1674.19. The pullback from there completed Waves C, D, and E, to finish Wave 2. This rally should now carry the SPX to new all-time highs.

There is near term resistance at 1665. A move into that area, followed by a move below 1655 would likely end this rally.

The more likely scenario is a move above 1665 (another gap up open?), and a continuation of this move. I would look for a move to 1679, and ultimately a move to 1692-1702.

Thank you.





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