The market continued lower today, starting with a
gap down open, and never looking back. After initially falling to 1624.50, the
SPX bounced back to 1629, and then fell further to 1620.18. After another 4
point bounce, the market fell to 1615.43, which was followed by another 4 point
bounce. That bounce was followed by another drop to 1609, a bounce to 1617, and
then a drop to the low of the day at 1607.09. At that point the market turned
choppy, trading in between that low and 1615. The SPX fell back to 1608.38 near
the close.
The SPX dropped below my target level of 1616, but
is now within the range for completing the sequence from the 1687.18 high. With
the SPX completing a 5 Wave sequence from that high at 1608.8, and now within
my target zone for the completion of this wave, I would look for the SPX to
move higher from here. If the SPX moves above 1614, I would look for the index
to stage a rally.
Near term support is at 1618, and the 1640. If
this is the end of this wave, I would have an initial target of 1653.
It is still possible that this wave has not yet
completed. Should the SPX fall below 1608, then another sequence to the
downside would need to be completed. I would expect this wave to hold above
1585.
Thank you.
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