It was another choppy day for the markets, as the
SPX remained range bound for the second straight day. Yesterday afternoon the
index had completed 5 waves down from the 1758.73 high at 1749.58, and then
rebounded to 1757.07 onto the close. I expressed my reservations about a
continued move to the upside, and this morning the SPX started the day lower,
falling to 1749. After a small bounce the SPX fell further, dropping to 1744.
The index then rallied sharply, rising to 1754 before reversing course and
dropping to a new low from the 1850.84 high at 1737.92. This completed a higher
degree sequence from 1758.73 high.
From there the SPX rebounded, rising to 1746,
dipping back to 1740, and then steadily rising until it reached 1755.79 by
early afternoon. This looks to be a 5 wave sequence from the morning’s 1737.92
low. The index then fell to 1749.92 before recovering into the close.
Yesterday I said the move from 1739.66 to 1758.73
looked to be 3 waves. There is another, more complex count that shows it as 5
waves. Using that count, it looks like 4 waves have now completed from Monday’s
1739.66 low, 1758.73-1737.92-1755.79-1749.92. You will notice that the second
wave, 1737.92, completed below 1739.66, and the third and fourth waves
completed between 1739.66 and 1758.73. This is exactly what I would expect to
see in a semi-inverted corrective wave. Given the 4 waves that have completed,
the fifth wave projects to 1776, quite close to the 1773 level I have been
mentioning. And so, it appears that the count I have been looking at, namely a
move to 1773, followed by another leg to the downside, possibly to 1679, is
still on track.
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