After testing the 1651 support level yesterday, and
completing a 5 wave sequence to the downside from the 1729.86 high, the SPX
rallied from that level, moving to 1662 during the afternoon. With a small
pullback to finish the day on Wednesday, it looked like the market was set to
rally. Rally it did today, gapping higher at the open, and reaching 1682 by
mid-morning. It soon reached the 1685 resistance level, and then traded
sideways until the last hour of trading. The SPX hit 1692.48, pulled back
slightly, and then rose into the close.
I had set an initial target near 1700 for this
move to the upside, which the market has nearly reached. From the 1646.47 low
yesterday, it looks like the SPX completed the first wave higher yesterday at
1662.47. It appears that the pullback yesterday afternoon may have been wave 2,
with wave 3 occurring this morning as the index rose to 1685.43. The sideways actions
followed by the rise to 1692.48, and then the pullback to 1688.91 looks to then
have completed an inverted corrective wave 4. This means a wave 5 would be
expected next. Given the above scenario, the optimal target for wave 5 would be
1745. Some of you may recall 1745 as my target for the last uptrend. That time
the market fell short of the target, but it is interesting how numbers seem to
re-appear time after time. We’ll see if the SPX makes it to that level this
time.
Since my longer term count has changed, the 1776
minimal target for the completion of the sequence from 1074.77 no longer
applies. However, after the 1745 target I am expecting one more move higher, so
we may still see that number.
Short term resistance is at 1703, and then 1723.
Support remains at 1685, 1668, and then 1651.
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