As has almost become the norm, the SPX gapped
higher to a fresh all time high, and then pulled back. After a 5 point drop the
index tried to stage a rally, but breaking recent form the SPX then continued
lower. The index drifted lower until the FOMC announcement, then bounced 6
points before heading for the lows of the day. The index moved down to 1757
before making it back up to 1766. The SPX then faded into the close.
This morning’s high of 1775.22 completed a 5 wave
sequence from the 1740.50 low. This wave had been difficult to follow, but now
seems to be 1758.46-1753.21-1764.99-1768.21-1775.22, with wave 4 being an
inverted corrective wave. From the 1646.47 low, I count 3 waves. The first part
of this wave counts best as a complete sequence from that low to 1758.16. The
drop to 1740.50 was wave 2, and today’s high completed wave 3. If this
afternoon’s low was wave 4, it would project wave 5 to complete between 1779
and 1798, with an optimal target of 1788. There are still several possibilities,
so the next couple of days bear close watching.
At the moment it still seems most likely that the
SPX will make one more high for this move, with a target of 1788, before a
pullback. If this scenario does play out, there should be at least one more
move higher before the sequence from 1077.74 concludes.
Near term support is at 1753, and then 1744.
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