Well, it certainly looks like I missed all the
excitement. Luckily, the fish in Minnesota were a bit easier to figure out than
this market has been lately.
After declining to 1577.70 on Friday, and then
rallying into the afternoon to 1598.31, there was hope that the correction
might be over. Those hopes were dashed this morning as the SPX gapped lower,
and quickly dropped to 1560.51. After a short rebound, the index fell to
1560.33 by mid-day. That was followed by an impressive rally to 1586.45, a 26
point rally, after which the SPX declined was again into the close.
Looking at the entire decline from this point, it
appears that the SPX completed a 5 Wave sequence down, which may signal the end
of this decline. It would now appear that 1687.18 should be treated as the
high. From there, the decline to 1635.53 would be Wave 1 of the decline. The
SPX then completed an inverted corrective Wave 2 at 1654.19. This sequence went
1635.53-1674.21-1598.23-1648.69-1608.07-1654.19. The three waves to the upside
were 37, 50, and 46 points. The 37 point rally started from the highest point,
and the 50 point rally from the lowest. Ranked by starting points, the rallies
were, 37, 46, and 50 points. This proportionality is the basis of my model.
From the Wave 2 high, Waves 3, 4, and 5 completed
as 1608.34-1614.02-1577.70. This completed a 5 Wave sequence from the 1687.18
high. This then became Wave 1 of a higher degree wave which completed today at
1560.33. I have been mentioning my target of 1561 for some time, and this
target seems to have turned out to be quite accurate.
There is still a chance that this market may make
another slightly lower low, and would look for the SPX to move above 1598.31 to
confirm this as the low. I will wait to get that confirmation before looking
ahead to the next move.
Thank you for your continued support.
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