Tuesday's Market 01/28/2014

As of my last post, I was looking for a move to between 1828 and 1845 to complete a 5 wave sequence from the October 2011 low of 1074.77. My short term count turned out to be incorrect, as the SPX made a high of 1850.84. This high would seem to complete the aforementioned sequence.

From the 1074.77 low, my count has 1292.66-1158.66-1422.38 as the first three waves of the sequence. Wave 4 turned out to be an inverted corrective wave that completed at 1560.33. The recent 1850.84 high satisfies my model for the completion of this sequence.

From the 1560.33 Wave 4 low, I count 1709.36 as Wave 1 of 5. Wave 2 was an inverted corrective wave that completed at 1646.47. Wave 3 completed at 1774.54, and was then followed by Wave 4 at 1746.20. Once again, the 1850.84 high completes this sequence according to my model.

The sequence from 1746.20 proved to be the most challenging. The quick rise to 1773.44 was the first wave in this sequence. The small pullback to 1760.64 would ultimately be Wave A of an inverted corrective wave. Wave 1 of B completed at 1802.33, with Wave 2 of B turning out to be a semi-inverted corrective wave which completed at 1767.99. Waves 3, 4, and 5 of B then completed as 1811.08-1801.35-1849.44. From this point, the inverted corrective wave that started at 1773.44 could now finally complete, and it did at 1815.52. Following this rather extended sequence, Waves 3, and 5 then completed quite quickly at 1837.41-1834.14-1850.84. So the 1850.84 high completed a 5 wave sequence from 1746.20, which completed a sequence from 1560.33, which completed the entire sequence from 1074.77.

If this count proves to be correct, the SPX should continue lower, with a first target of 1679.

Counting from the 1850.84 high, I have a Wave 1 completing at 1835.23. The subsequent rise to 1849.31 would seem to be Wave A of an inverted corrective wave. Wave B carried the SPX sharply lower, completing a sequence as 1832.38-1846.87-1824.49-1828.50-1772.88. Wave C seems to have completed at 1793.64 and Wave D at 1779.49.

Given the sequence so far, I would be looking for Wave E and Wave 2 from the 1850.84 high, to complete near 1800-1801. After that I would look for another move to the downside, perhaps to 1744. After a bounce off this low, the stage should be set for a final move lower to 1679.