Tuesday, July 23, 2013

Tuesday's Market 07/23/2013

It was another record setting day for Wall Street, as the SPX reached another all-time high of 1698.78. The market gapped up at the open again today, and hit that record within the first few minutes of trading. After that it was what for this market qualifies as a steep decline, as the SPX dropped to 1691.13 after the first hour and a half. The market tried to rally after that, rising through most of the afternoon, with the index climbing back to 1696.26. The SPX then sold off during the last hour, dropping to 1691.52 before rising into the close.


Looking at the waves from yesterday’s 1697.61 high, I count a 5 wave sequence down to 1693.01, a sequence up to 1698.78, followed by 3 waves down at 1694.05-1695.58-1691.13. This completed a semi-inverted corrective wave from the 1697.61 high, which was a little unexpected. From 1691.13, the SPX completed what appear to be 3 waves higher, before the late afternoon sell-off.


The appearance of the semi-inverted corrective wave, followed by what appear to be only 3 waves higher, leads me to believe that 1696.26 is the completion of a wave from 1671.84. This could be Wave D of an inverted corrective wave from 1626.61. If this is true, I would expect a pullback to around 1684. This could also be a smaller degree wave 1 from 1671.84. This will be determined by whether or not the SPX moves lower from here.



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