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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