The SPX opened slightly lower this morning,
dropping to 1767.85 before staging a small rally to 1773.44. After that point
it seems the market closed early, as the rest of the day was spent in a very
narrow range. It has now been nearly two weeks since the SPX hit an all time
high of 1775.22, just below the critical 1776 level I have mentioned for some
time. Since then the index has dropped to 1752.70, right at the 1753 support
level, rallied back to 1774.54, and then dropped to the secondary support level
of 1744. The market again has rallied, with the SPX now at 1771.80.
The 1776 level is critical from my standpoint,
because it is the level at which a 5 wave sequence from 1074.77 could possibly
complete. Picking up from my last count from the 1646.47 low it appears the
market has now completed 4 waves of a sequence. Wave 1 completed at 1703.44,
and was followed by an inverted corrective wave 2 which completed at 1740.50.
There are a couple different ways to interpret the move since then, with one
scenario having the all time of 1775.22 as wave 3, which was followed by a
lengthy wave 4 which completed at 1746.20. It is also possible that wave 3 was
the lengthy wave, and completed at 1774.54. The subsequent drop to 1746.20 was
then wave 4. I prefer the second scenario at the moment, but it has little
effect as far as projections go for wave 5.
At this point, I would give 1782 as the target for
this wave. That would also be a point at which a sequence from 1074.77 could
complete. If the SPX gets to that level, I will go into more detail about that.
This is a difficult market to be completely certain about anything, so the
there are several levels to watch for further guidance.
If the market pulls back from here, without moving
above 1776, I would still prefer the scenario of the index staying above the
previous low of 1646, and then making at least one more higher high. If the SPX
gets to near 1782, and then starts to pullback, chances increase that the
sequence from 1074.77 has completed. A move above 1787 and this market may
continue to move higher. The market should resolve this soon.
Thanks as always for your analysis Steven. I've been looking for $SPX 1784 area....happy to see you mentioned.
ReplyDeleteHave a great day.....J
Thanks J. Looks like a move to 1782-1784 is likely. The question is near term or medium term high? I'm starting to lean to medium term, but still a tough call. Which way are you leaning?
DeleteEnjoy your day,
Steve
Thanks I did.
DeleteSteve......near/short term.....however, I did close a few long pos just in case...smile!
All my best; J
P.S. Although "Medium Term" def does depend on one personal preference....I think...well one can say the same about "Near/short Term"...smile
You are right of course J. It is not like me to be so arbitrary. A good place to close some longs. Gains can disappear quickly in a market like this.
DeleteGood luck in the near/short term, medium term, and long term, whatever they may turn out to be.
Steve
Steve, interesting you are suggesting a top here - what is your correction expectation from here eg timing and depth? Thanks
ReplyDeleteHi mharrison,
DeleteI would stress possible, strongly. Calling tops has been a fool's game thus far. If we are at a top, again, if, 1660 would be a good first target. Keep in mind a move above 1787 will most likely lead to higher prices.
Thanks,
Steve