In the wake of yesterday’s new all time high and late
afternoon sell-off, the SPX opened essentially flat, moved marginally higher, and
then dropped below yesterday’s low to 1785.92. At that point the “buy the dip”
mentality prevailed, and the index moved higher. It rose modestly above the
1794 support/resistance to 1795.51before running out of momentum, and rolling
over once again. The first selling wave took the SPX to 1788.64, and after a
bounce back to 1794 the second selling wave took the index down to 1784.72. The
SPX tried to rally again, moving up to 1791 before falling back into the close.
After hitting a new all time high at 1802.33, the
SPX has given back a little under 18 points. As I stated last week, I was
looking for a pullback of slightly more than 11 points, and over the weekend I
said a pullback to the 1784 area was most likely. The SPX looks to have
completed a 5 wave sequence from the high at 1784.72, and within the range to
complete the inverted corrective wave from 1773.44 that I was looking for. The
index can still move lower without jeopardizing the count, with a move above
1795.51 likely signally the end of the pullback.
As I pointed out this weekend, I am looking for
this wave to carry above 1828 to complete a sequence from 1746.20, 1560.33, and
possibly 1074.77. If this wave falls short of the 1828 level the first scenario
I outlined over the weekend would become more probable.
No comments:
Post a Comment