It was another higher open for the SPX this
morning, having come off the inverted corrective wave I identified yesterday.
The index rose to 1867.36 before taking a slight pause, and then proceeded to
1872.06. This completed a 5 wave sequence from 1856.31. After falling to
1867.10, the SPX chopped its way higher to the high of the day at 1873.76. This
completed a 5 wave sequence from 1867.36. The index then made 5 waves lower
into the close, completing that sequence at 1870.52.
Looking at this wave from the 1839.57 low, the SPX
completed a sequence at 1862.30. From there an inverted corrective wave to 1856.31
followed. The index then completed another sequence at 1872.06 and another at
1873.76. I mentioned yesterday that a more complex corrective wave from the
1862.30 high could be forming, and it appears that is the case. I count an in
inverted corrective wave from that high as
1856.31-1872.06-1867.10-1873.76-1870.52. If that is the case, the SPX should
continue higher from these levels.
It does appear that the SPX is headed for new
highs, but I still remain somewhat cautious. The wave structure from 1839.57
that I outlined above is bullish, but I will take this one step at a time.
Yesterday I mentioned the 1874.40 level as being significant, and that is still
the case. I will also mention one additional level that may prove important,
and that is 1877-1880. A move into that level, followed by a pullback, could be
a danger signal. Again I would look at the 60 Minute MACD(13,34) for an
indication of the end of this wave. A negative crossover from that level could
mean this market has further to go on the downside. This should prove to be an
interesting day.
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