The recent increased volatility continued into
today’s trading session, which featured extended moves both to the downside,
and to the upside, but in the end left the SPX below Thursday’s close. The
session began with the index suffering a steep decline, falling to 1772.26,
which was just slightly higher than the recent low and more than twenty points
lower than the previous close. From there the SPX staged a remarkable comeback,
closing the opening gap, and nearly moving into positive territory for the day.
After that the SPX relinquished some of that comeback, falling back to 1781
near the close.
I am counting today’s opening decline as Wave D of
the inverted corrective Wave 2 from 1835.23. The rally to 1793.88 that followed
appears to be three waves. A Wave 1 completed at 1779.40, and was followed by a
decline to 1774.03, which I am counting as Wave A of an inverted corrective
wave. Wave B then carried the SPX to the day’s high of 1793.88. The decline
that followed can be counted as Waves C, D, and E, and thus Wave 2.
If this interpretation is correct the SPX should
move higher from this point. I am looking for the index to complete Waves 3, 4,
and 5 as 1792-1795-1800. This should complete Wave E of the inverted corrective
wave from 1835.23. After that I would look for the recent decline to continue,
with 1752 being the next target. I still see this decline eventually moving to
1679.
I will try to discuss this in more detail over the
weekend, but once again, I am looking for a move to 1800, followed by a decline
to around 1752.
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