Wednesday, October 23, 2013

Wednesday's Market 10/23/2013

The SPX gapped down at the open this morning, dropping below 1742. After staging a small rally, the index continued lower, dropping back to 1742, rallying to 1746, and finally reaching a low of 1740.50. This completed a 5 wave sequence from yesterday afternoon’s 1758.16 high. As has been the pattern lately, the SPX reversed course by late morning, and started working its way higher. The index rallied to 1746.66, fell back to 1742.51, and then rallied again to 1748.39 by mid-afternoon. The SPX then fell back to 1744.72 before moving higher into the close. This may have formed waves 1-4 of a sequence to the upside.


This would be interesting because it would give a target for wave 5 of 1750-1751. After yesterday’s pullback to 1747.58 after the 1759.33 high, the SPX completed three waves to the upside at 1755.51-1751.91-1758.16. If a sequence from today’s low completes at 1750-1751, it would complete an inverted corrective wave from the 1747.58 low. This would indicate a continuation of the move lower to follow.

I am still looking for the SPX to move lower. There are several support levels between 1719 and 1661 that would fit the target range for this low. Short term, it looks like the SPX may open higher, to 1750-1751, to complete an inverted corrective wave from 1747.58. This would set the stage for another move lower, with support at 1719.


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