Having completed a semi-inverted corrective wave
from Monday’s explosive opening late yesterday afternoon, the SPX was poised to
move higher this morning, and it did. Today’s open was more muted than yesterday’s,
but the index moved steadily higher, moving up to 1704. After a small pullback
the SPX advanced again, this time to 1705.24. Another pullback was followed by
a third move higher, with the index reaching the high of the day at 1705.52. This
completed a 5 wave sequence from yesterday’s late afternoon low. After that the
index completed three waves down at 1704.03-1705.33-1703.63 before moving
higher into the close.
It now appears like the semi-inverted corrective
wave that completed yesterday was but the first wave of an inverted corrective
wave that completed this afternoon at 1703.63. Interestingly, this is the same
structure that started this entire rally from 1627. By my count, the SPX has
now completed wave 2 of 5 from that 1627 low. It would appear that the index is
in the final stages of this wave. My target remains at 1745, but that is my
optimal target. The minimum target, given my interpretation of the wave
structure, would be 1713. A fairly wide range to be sure, but that is usually
the case with a wave structure such as this, with the impulse waves increasing
in length. Sometimes the smaller degree waves can narrow the range, but with
only two waves of wave 5 completed, that is not the case at the moment.
I have been looking for this wave to end near
1745, and then be followed by a move lower to around 1680. As I said, the exact
end of the current wave is difficult to pinpoint, but this has been a rather
extended advance, and the risks of a pullback are growing. It is important to
note that the 1680 number should not be taken as a target, but as a guideline
at the moment. It is just as likely to see a shorter pullback, and then a
continuation of the advance into the 17733-1776 area. I am content to see how
this plays out over the next couple of days, or through the completion of this
wave.
I am looking for the current wave from 1627 to
complete above 1713, with an optimum target of 1745. Support remains at 1685,
1669, and then 1661.
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