On Thursday the SPX completed a 5 Wave sequence
higher to 1690.94. On Friday morning the index moved lower, eventually finding
itself at 1676.03. Last week I said that it appeared that the SPX had completed
a 5 wave sequence from 1604.57 at 1698.38. With the action on Thursday and Friday
it seems that I was a little ahead of myself, as that high now appears to have
completed a sequence from 1671.84, but not 1604.57. The moves on Thursday and
Friday can then be seen as the completion of an inverted corrective wave from
1684.51. This wave took the form 1671.84-1698.38-1680.07-1690.94-1676.03. That
would then complete 4 waves from the 1560.33 low. The optimum target for wave 5
would then be 1778, very close to my ongoing minimum target of 1776.
This morning the SPX started to the downside,
reaching 1687 before bouncing back to 1691. The selling then continued through
the morning, dropping to a low of 1681.86. After that the index started to
rally, rising to 1686 before a small pull back. The rally then continued to
1688.50 by mid-afternoon, which was followed by a larger pull back to 1684.
From the 1676.03 low, the SPX completed 5 waves
higher to 1691.85. This was followed by a 5 wave sequence lower to 1681.86.
From that low it would appear that the index is forming a more complex wave to
the upside.
This has been a very interesting wave, and it
should continue to be through the end of the week for obvious reasons. Things
can change quickly in a market like this. A move below 1676.03 would indicate
my count is incorrect, and may signal a further move to the downside. I am
still looking for a move above 1698.38 to confirm the continuation of the
current move. My target to the upside remains a minimum of 1776.
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