It was another gap up open for the SPX today. And
today I am not just making a joke. After that gap up open, the SPX moved to
1671.00 before falling back. The index slipped to 1666.29 before resuming the
rally. First, the SPX made a slightly higher high at 1671.03, and then fell
back to 1668.35. After moving sideways into the early afternoon, the SPX began
to rally again, and quickly moved to 1675.08. After another small pullback, the
index continued to move higher into the close, topping at 1676.63.
Yesterday I said that I was looking for a move
higher, giving a target of 1666, and then expected a small pullback before
another move higher. The SPX did open higher, moving slightly higher than my
target, but the pullback from that high stopped at 1666.
It would appear that the open to 1671.00 completed
the 5th wave from yesterday afternoon’s 1647.66 low. By my count,
that was Wave 3 from 1604.57. The small pullback that followed was most likely
Wave 4, with Wave 5 from 1604.57 now underway. I expect this wave to end at
1689-1690. If the SPX moves to this level, I would then expect the 20 point or
so correction I spoke of yesterday.
On a cautionary note, the sequence from 1647.66 to
1671.00 contained no complex corrective wave. Often this results in a secondary
sequence forming, and such a sequence may have topped this afternoon at
1676.63. If the SPX falls below 1672.77, this would be the most likely
scenario. I would expect support to be at 1670, and then 1661.
I am looking for the SPX to move to 1689-1690. Support
should be at 1670, and then 1661.
Thank you.
No comments:
Post a Comment