Continuing the move up off yesterday’s 1678.12
low, the SPX moved higher at the open, moving up past 1684 at the outset. After
a small pullback, the index continued higher, hardly pausing until it surpassed
the previous all-time high, and rising to 1693.12. From there, the SPX started
giving back its gains, finally falling to 1687.10. Another rally followed, however
this one failed to reach new highs, failing at 1691.53. The index then dropped
to 1687.52 before rising slightly into the close.
Yesterday I stated that it appeared the SPX had
now completed 3 Waves from the 1560.33 low, 1626.61-1604.57-1684.51.Tuesday’s
pullback to 1671.84 could be the fourth wave. From that low, I then counted 4
waves, 1677.14-1672.99-1684.75-1678.12. Given that count, it was likely that
the index would move higher.
Today’s action formed a 5 wave sequence from
1678.12 to the high of 1693.12. The decline from that point was interesting,
with a 5 wave sequence completing at 1688.28. It then appears that a rather
rare corrective wave 2 completed at 1691.53. Technically this is often referred
to as an expanding triangle, and it went 1689.05-1688.10-1689.36-1687.10-1691.53.
Waves 3, 4, and 5 from 1693.12 then completed as 1687.99-1689.37-1687.52. This
should now complete waves 1, and 2 of 5 from the 1671.84 low. My target for
this wave remains at 1718. If that target is met I am eventually looking for a
high above 1776 before a substantial correction.
This seems to be the point that tends to occur
within each wave where there is an extreme amount of uncertainty. I do have some
concerns due to some technical aspects of the market, but my count still
indicates we will see higher prices.
If the market moves below 1671.84 at this point,
my current count would be wrong, and lower prices may be on the way. For the
moment, I will continue with my current count. Again, I expect the current wave
to reach 1718, and ultimately we should see prices above 1776. A move below
1672 would change my view.
Thank you.
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