It was an encouraging opening for the bulls this
morning, as the SPX gapped higher, and quickly surpassed the 1700 level once
again, settling at 1700.18. That bullish spirit did not last long however, as
the index sold off sharply, dropping into negative territory, and falling to
1688.38. The bulls took control again at that point, moving the SPX back near
the day’s high to 1699.75. After a small pullback, the index moved back above
1700 for the second time, hit 1700.14, and then turned choppy as it moved lower
into the close.
This morning’s move higher seems to have completed
a 5 wave sequence from yesterday’s 1684.91 low. After a corrective sequence
lower to 1688.38, the SPX completed another sequence to 1699.75, which was
followed by a semi-inverted corrective wave that completed at 1697.50. If this
count is correct, I would expect the SPX to move higher from this point.
My target for the current move remains at 1776. It
is still best to be cautious at this stage. If the SPX can clear 1709, the
probabilities of reaching that target increase. If the index moves below 1685,
I am looking for support at 1676. Resistance is at 1710, and then 1736.
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