The SPX started the day by moving lower; a gap
down, and then a continuation down to 1872.42. This was a larger pullback than
I had anticipated, as I had thought that Wave 4 from 1862.35 had either
completed, or was close to completing near Friday’s close. From there the index
rose in a somewhat choppy fashion to 1881.66. I had given 1887 as the target
for the completion of Wave 5, but the pullback this morning altered that
target. It now looks like 1881.66 completed Wave 5. The SPX pulled back
slightly from that point before climbing to 1884.89. Another choppy pattern
developed through the afternoon, which ended at 1882.58. A final move higher
pushed the index to 1886 just before the close. It appears that the SPX
completed a larger degree wave from the 1862.35 low to today’s 1886 high as
1881.66-1879.60-1884.89-1882.58-1886.
The SPX still seems to be indecisive, leaving open
several possibilities. As I mentioned on Friday, there is resistance at
1893-1894. A move to that level, followed by a pullback, could result in a drop
back to the 1850 level. As I also noted on Friday, sometimes a sequence will
terminate slightly below a resistance level so the next move can gap over that
level. A move above 1894 most probably means a run up to 1924-1925.
With the completion of a 5 wave sequence today
there is one other possibility. The choppiness of late is either result of
nested waves, which is my current count, which should result in a more extended
wave, or the result of complex corrective waves forming. With this in mind a
pullback from these levels to 1852 would complete one of those complex
corrective waves, and clear up some of the uncertainty in the wave counts. As
far as that goes, a move to 1893-1894 followed by a pullback to 1863 would
clear things up even more. I continue to this as the 5th wave from
1560.33, which should conclude above 1957 and complete the entire wave from
1074.77.
For the moment resistance is at 1893-1894, and
then 1924-1925. Support is at 1852.
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