Although it is still possible that the SPX is
still correcting the wave from 1834.44, it is becoming much more likely that
the index has completed a wave from 1737.92. If this turns out to be true, the
SPX is likely in Wave E of an inverted corrective wave from the August 1709.36
high, which would have a target of 1758.
When the
SPX reached 1878.16 last Friday afternoon, it completed a sequence from the
1834.44 low. I have been looking at the action from that point as a corrective
wave. The alternative is that the index made three waves down to 1867.04, and
then three waves up as 1879.73-1872.73-1882.35. This would have completed an
inverted corrective wave from the 1858.71 high as
1834.44-1878.16-1871.59-1877.86-1867.04, and in turn a 5 wave sequence from the
1737.92 low as 1858.71-1867.04-1879.73-1872.73-1882.35.
From that high, I see a complete sequence to
1854.38, followed by three waves up to 1874.40. This is likely part of an
inverted corrective wave that has yet to complete. Today the index completed a
sequence to 1845.81, and then rebounded to 1852.98, before completing another
sequence down to 1841.86. With a sequence from 1882.35 not yet complete, this
market should have further to go on the downside.
In the short term, resistance is at 1853, and then
1863. If the SPX gets much above 1863, this all may have been a corrective wave
from 1878.16. Near term support is just below today’s low of 1841.86.
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