The SPX moved lower this morning, continuing the
pull back from yesterday’s 1698.38 high. The index fell to 1690.31 before
rebounding, a rebound that took the SPX into positive territory at 1687.05.
That in turn led to another move lower, which found the index eclipsing the
previous low by a fraction, stopping at 1680.07. The SPX moved steadily higher
from there, rising to 1689.42 before pulling back to 1685.04. From there the
index again moved higher, making it to 1690.94 before fading into the close.
As I indicated yesterday, the SPX was in the
process of forming an inverted corrective wave 2 after the wave 1 drop to
1687.56. This corrective wave did end yesterday at 1686.43, with waves 3, 4,
and 5 completing this morning at 1680.31. This turned out to be only wave 1 of
a higher degree wave, with wave 2 carrying to 1687.05, followed by waves 3, 4,
and 5 completing just below the previous low, at 1680.07. From there the SPX
appears to have completed a 5 wave sequence higher at 1689.42. After a small pull
back, the index completed another 5 waves at 1690.94.
The SPX seems to have completed a wave 1 at
1689.42. The pull back appears to have occurred in three waves, and with
another 5 wave sequence completing above the 1689.42 high, it is likely that
the index has not yet completed the current move higher. If the SPX move above
1698.38, the probabilities for a continuation of the uptrend will increase. At
this point it looks like my 1718 is still in play on the upside.
If the SPX moves below 1680.07, the most likely
stopping point would be 18-20 points below the high from 1680.07, which is
currently 1690.94. This would give a target between 1671 and 1673. Otherwise
support is still at 1680, and then 1655.
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