Tuesday's Market 10/08/2013

I apologize for my dearth of posts lately. It has been a hectic month. I will try to get up to speed.

In my previous posts, I had stated that I was looking for a move to 1745, followed by a pullback to possibly 1680, and then another move higher to 1776 to complete a 5 wave sequence from the October 2011 low of 1074.77. That obviously to this point has not come to pass. The SPX fell short of my 1745 target, topping at 1729.86, and now has retreated to 1655. I still believe the sequence from 1074.77 has not completed, and the market should make at least one more move to new highs to complete that sequence.

The completion of this wave appears to be even more complex than I had originally thought. The above chart shows my original thought for this wave. This had the first three waves of the sequence completing as 1292.66-1158.66-1422.38, which was then followed by an inverted corrective wave 4 which completed at 1560.33. I was then looking for 5 waves to complete above 1776 to complete wave 5 from 1074.77.

Instead, it appears that the first 3 waves were not waves 1, 2, and 3 of a sequence, but rather Wave 1, Wave A of an inverted corrective wave, and another Wave 1. The move that completed at 1729.86 was the end of a 5 wave sequence from 1158.66, and thus Wave B of the inverted corrective wave. As I have stated in the past, Waves C, D, and E can then complete either as a zig-zag formation, or with Wave D carrying above Wave B (1729.86), to be then followed by Wave E. If this turns out to be the case, the SPX would then still have to complete Waves 3, 4, and 5 to the upside to complete the sequence from 1074.77.

So that would be the current long term count, which leaves us with the shorter term count. The SPX looks like it completed a 5 wave sequence from the 1729.86 high today. Wave 1 completed at 1720.20, and was followed by an inverted corrective wave to 1703.85. The move lower to 1674.99 then completed the third wave. After bouncing up to 1695.55 for the fourth wave, the move today to 1655.03 would complete the sequence.

A lot of information I know. For now, I believe a 5 wave sequence from 1729.86 has completed, or is about to complete. An initial target for this next move higher would be 1700, with resistance at 1668, and then 1685. I would like to see a move above 1668 to confirm the low is in place, and if the 1651 support level does not hold, I would need to re-evaluate the count.