Tuesday's Market 03/11/2014

The wave I have been tracking from the March 3^rd 1834.44 low got off to a rousing start. The SPX quickly rose to 1876.23, but then lost momentum while moving to 1883.57. From there the index dipped to 1867.04 on Monday, and then tried to test the high this morning, but failed, topping out at 1882.35. The rest of the day found the SPX falling steadily, dropping to 1863.88 before recovering into the close.

I had been looking at the degree of this wave to be equivalent to that of the 1737.92 to 1858.71 wave, and had put a minimum price of 1909 on it. The wave from 1834.44 started with a move higher to 1848.54 for Wave 1. The pullback to 1840.43 that followed I count as Wave A of 2. Wave B encompassed the remainder of the move higher, completing at 1883.57. Waves C, D, and E of two then followed, bringing the SPX down to 1870.56. From that low the index moved higher in three waves to 1878.16, which complete Waves 3, 4, and 5, and completed a sequence from the 1834.44 low.

Since completing that sequence the SPX has been in another extended corrective wave, much as it did after reaching the 1858.71 high. This corrective wave has also been comprised of a semi-inverted corrective wave, as was the case following the 1858.71 high that contained within it another semi-inverted corrective wave. Wave A of this wave ended at 1867.04 and Wave B at 1879.73. Wave C itself took the form of a semi-inverted corrective wave, and completed at 1868.51. Wave D followed at 1873.69, and Wave E at today’s low of 1863.88. From there it appears the SPX rose in a 5 wave sequence to 1868.41, and was followed by three waves to the downside.

Normally only one corrective wave in a sequence is a complex wave, so give the fact that Wave 2 from the 1737.92 low, and the recently completed corrective wave are complex, it is likely that they are of different degrees. This means that the wave sequence from 1834.44 to 1878.16 was only wave 1 of 3 from 1737.92, and not the entirety of Wave 3. I am still looking for Wave 3 to complete above the 1909 level.

From today’s low of 1863.88, the SPX formed a 5 wave sequence to the upside, followed by three waves lower. The three waves lower are likely part of an inverted corrective wave, and I would be looking the index to continue higher from here.

At this point, if the SPX moves below 1863.88, there is a good possibility that something completely different is going on. My alternate count has the index in an inverted corrective Wave 2 from the 1560.33 low. A move below 1863.88 would indicate that the SPX has begun Wave E of this corrective wave, and could be headed much lower.