Wednesday, October 16, 2013

Wednesday's Market 10/16/2013

The SPX opened higher this morning, jumping above 1710, and then continuing higher until it reached 1721.75. After that the index worked lower into the afternoon, falling to 1715.19 before rising near the high of the day towards the close.


The higher opening this morning supports the alternate count I discussed yesterday that an inverted corrective wave completed yesterday at 1695.93. The late afternoon rise to 1704.46 then completed a wave 1, with the pullback becoming wave A of an inverted corrective wave. Wave B of this wave completed at today’s high of 1721.75, very close to the 1723 resistance level I have been mentioning. The meandering pullback into the afternoon completed waves C, D, and E, and thus wave 2 from yesterday’s 1695.93 low. This means the SPX should now complete waves 3, 4, and 5 to the upside.


Looking at the count from the 1646.47 low, it does look like an inverted corrective wave completed from 1662.47 to 1695.93. I have added this count to the chart, which is denoted by the use of parentheses. This count continues to point to higher prices, and my target remains 1745. 1723 would be the last resistance level suggested by the previous wave structure, and if that level is cleared the SPX should be headed to new highs. Support is at 1703, and then 1685.

While it is difficult to pinpoint the exact high of this move at the moment, I have been looking for it to be above the previous high of 1729.86, with an optimal target of 1745. 

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