The SPX worked slightly lower in the first few
minutes of trading, dropping to 1866.99 before bouncing to 1871.77. That bounce
was followed by another move lower to 1864.82. A slightly better rally
followed, with the index moving up to 1873.04 before dipping back to 1868.14.
An even better rally followed this dip, with the SPX hitting a high of 1878.28 before
falling back into the close.
After completing a 5 wave sequence at 1872.49
after yesterday’s 1862.36 low, the SPX started the day off by completing three
waves down from 1872.49. This can be counted as Waves A, B, and C of an inverted
corrective wave. The rally off the 1864.82 occurred in 5 waves, and completed
Wave D. Another 5 wave sequence lower to 1868.14 then completed Wave E, and
Wave 2 from yesterday’s low. The rally from that low looks like Wave 1 at
1871.01, an inverted corrective Wave 2 at 1875.54, and Waves 3, 4, and 5
completing in quick succession at 1877.39-1877.23-1878.28.
This completes 3 waves from yesterday’s 1862.36
low. Wave 4 may also have completed with the slight pullback before the close.
If so, this would give a Wave 5 target of around 1887. As I pointed out
yesterday, there is a danger zone between 1893 and 1895. Completing a sequence
just below that level could set up a gap above that resistance level, but that
is getting too far ahead.
Yesterday’s 1862.36 low continues to be a critical
level. A break below that level would likely lead to much lower prices.
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