Today’s market action was a virtual carbon copy of
yesterday. A gap open to start, followed by a sharp pullback, a steady rise
into the close, and a mild pullback at the close.
Today’s gap open took the SPX to 1603.58, and was
followed by a pullback to 1594.94. From there the index rose steadily through
the rest of the morning and into the late afternoon hours carrying the SPX to
1606.83. The index then fell back to 1603 before the close.
As I mentioned yesterday, the SPX had not yet
completed a 5 Wave sequence higher off the 1560.33 low. That was evident this
morning as the SPX gapped above yesterday’s high. This appears to be part of an
inverted corrective wave from yesterday’s 1593.79 high. This corrective wave
then completed at 1594.94. The steady rise into the afternoon then completed a
5 Wave sequence from that low, and a third wave from 1583.06.
The SPX seems to be in a nested wave structure,
with a Wave 1 at 1589.13, a Wave A of an inverted corrective wave at 1583.06,
and now 3 sequences of Wave B completed at 1606.83. Ideally, a move down to
1597, followed by a rise to 1607.70 would complete Wave B. At that point the
SPX should undergo a more sustained pullback.
Thank you.
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