Tuesday, September 17, 2013

Tuesday's Market 09/17/2013

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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