The SPX opened higher today, hit 1845.50, had an
ever so slight pullback, and then continued higher to 1851.55. From there the
index pulled back to 1849.24, and then rose steadily until it reached 1858.71.
After that the SPX dropped to 1856, bounced slightly, and then gained momentum
to the downside into the close.
Picking up the count from the weekend, I will make
one small change to the short term count from 1824.58. As I discussed over the
weekend, a 5 wave sequence completed at 1842.79. The change would be the move
from there to 1846.13. It now appears that from 1842.79, the index formed an
inverted corrective wave, and then completed a higher degree sequence at
1846.13. That high would be Wave 3 from 1737.92. Wave 4 then completed near
Friday’s close at 1835.60. The move today can then be counted as 5 waves from
that low, 1845.50-1844.09-1851.55-1852.15-1858.71. This would appear to be the
5th wave from the 1737.92 low.
Assuming a 5 wave sequence from 1737.92 has
completed, this could either be Wave 1 of 5 from 1560.33, or Wave E of an inverted
corrective Wave 2 from 1560.33. In the first case I would expect support at
1815, and then 1775. In the second case, I would be looking at a target of
1743. To confirm one of these two scenarios is in play, I would like to see the
SPX fall below 1835.60.
A rise above 1858.71 at this point would mean either
that Wave 1 is still ongoing, or that Wave 2 has completed. If Wave 1 is still
underway, it is possible that the index has just completed the fourth wave from
1824.58, or the Wave 2 low. 1846.13 would then be Wave 1 of 3, with either
waves 2, 3, and 4 completed into today’s low, or an inverted corrective wave
under formation. With the similarity in the pullbacks from 1846.13 to 1835.60
and 1858.71 to 1847.96, this is a possibility. On a move above 1858.71, 1873
would be the next resistance.
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