Wednesday, May 1, 2013

Wednesday's Market 05/01/2013


After hitting another all-time high on Tuesday, the SPX backed off that level today. In yesterday’s post I said a 5 Wave sequence had completed from 1536.03, and it was a likely point for the termination of Wave D. If it was, I was expecting Wave E to complete between 1582-1536. My target was 1573, with first level support at 1590.


The market dropped at the open, initially to 1591.48. After a short-lived bounce, the market continued lower to 1587.86. After a five point rally, the SPX headed lower once more, this time dropping to 1584.70. A six point move higher came next, and then one final move lower to 1581.28.

Today’s wave structure was fairly complex, as it seems the market is trying to make this as difficult as possible. To start with, I believe Tuesday’s 1597.57 high was the termination of Wave D. This morning’s initial drop this morning, 1597.57-1591.48-1593.99-1587.86 I see as three separate sequences. An inverted corrective wave followed, 1587.86-1593.11-1584.70-1589.10-1586.60-1590.79. That portion of the wave I am fairly confident about, which gives us either 4 waves of a 5 Wave sequence completed, or the beginning of a nested inverted corrective wave sequence.  I see it as 4 waves, with Wave 5 of that sequence completing at 1584.16. From there, the SPX went on to complete another 5 Wave sequence, of one higher degree at 1581.28. With a 5 Wave sequence completed from 1597.57 and within my target range for Wave E, this could very well be the end of this move lower.

A move above 1590.79 would confirm this, while a move lower would indicate the nested inverted corrective wave sequence is in play, with lower prices expected. 1573 would still be my target.

If Wave E has completed, that would be Wave 2 from 1074.77. We should now see waves 3, 4, and 5 to the upside. I still see significant resistance at 1598, and unless the SPX can break through that 1598-1602 resistance zone, like on this next move, I think it is highly likely that this entire uptrend will from 1074.77 will end there, in some king of triangle formation. If Wave 3 ends around that level, Wave 4 should be a small pullback, and one more move into that zone for Wave 5 will end it.









No comments:

Post a Comment