Wednesday, July 24, 2013

Wednesday's Market 07/24/2013

The market gave it a valiant try, but fell just short of managing a new all-time high. After the sell-off into yesterday’s close, the SPX gapped up again at the open, reaching 1698.38, less than a half point from the previous all time high. The index was quickly turned away from those lofty levels, as the SPX sold off rapidly, dropping into negative territory, and hitting 1687.56 before attempting to rally. The rally would not last long; as after rising to 1691.67, the SPX began to fall again, this time moving down to 1682.57. Following that, the index bounced around in a narrow four point range for the rest of the day.


Yesterday I noted that 1696.26 completed a 5 Wave sequence from 1671.84. With the drop yesterday afternoon, followed by the move above that 1671.84 high, the index completed a sequence from the 1604.57 low. This can be counted as 1604.57-1684.51-1671.84-1696.26-1691.52-1698.38. This most likely is the third wave from the 1560.33 low. There are still several ways in which this wave can complete, but my minimum target of 1776 remains intact.



From today’s 1698.38 high, the SPX fell to 1687.56 for wave 1 of this pullback. The small rally unfolded in three waves to 1691.67, and is most likely part of an inverted corrective wave 2. The drop to 1682.57 and small bounce from there may have completed this wave 2. The appearance of in inverted corrective wave indicates that there is still more downside to come before this pullback completes.

There is considerable support within a couple of points either side of 1680, and then 1655 after that.


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