It was another day, another gap up open for the
market. The SPX gapped higher, and then reached 1614 before a very slight
pause. After that pause, the index headed higher, hitting 1618, pulling back to
1614, and then hitting the high of the day at 1620.07. From that point the SPX
pulled back, dropping to 1612, and then moving back up to 1618. After dropping
to 1613, the SPX traded between that level and 1617 into the close.
Ideally I had been looking for a move lower to
1597, followed by a move higher to 1607. This would have completed Wave B of 2
from the 1560.33 low. The SPX did complete that Wave B of 2 today, but did so
by rocketing straight up to 1620.07. At that point the index did see the pullback
for Wave C of 2. Waves C, D, and E of these inverted corrective waves can
manifest themselves as either a zig-zag pattern, or as a pattern in which Wave
D surpasses Wave B, and Wave E completes without moving beyond the level of
Wave C. Usually after such a strong run-up, the three waves are more apt to
complete as a zig-zag, which would result in a more sustained pullback. After
the SPX dropped to 1611.94, moved higher to 1618.38, and then started to move
lower once again, it seemed like this pattern was underway. However, with the
last pullback remaining above the Wave C low of 1611.94, both patterns are
still viable. If these waves do complete as a zig-zag, Wave E should complete
between 1611, and 1608. If it does not, Wave D should rise above 1620, and then
be followed by a pullback of 8-10 points. Either way, I still see the market
moving higher before completing a 5 Wave sequence from the 1560.33 low, and
should complete around 1631.
Should this play out as anticipated, this should
merely complete the first wave of a sequence that may eventually move above
1776.
At the
moment a move below 1608 would put this count in jeopardy, while a move below
1588 could mean an end to this rally.
Thank you.
No comments:
Post a Comment