After some hesitation, the SPX broke through the
1892-1894 I have been mentioning, albeit without much conviction. As I talked
about yesterday, this likely means a longer duration move to complete the wave
from 1074.77. Due to that breakthrough, it appears there are still several
waves to go, although it may remain choppy throughout. My minimum target
remains at 1957.
The day started slightly higher, but the SPX
quickly reversed and dropped to 1885.39. The index rose steadily from that
point, hitting 1992.20 before pulling back to 1888.29. The SPX then turned once
again, climbing steadily to 1895.96. The index then traded in a narrow range
through the afternoon, hitting the high of the day at 1896.33 before slipping
into the close.
It looks like the SPX completed a wave 1 from
yesterday’s 1882.12 low at the open hitting 1888.80. The dip that followed was
wave 2, and the rise to 1992.20 wave 3. The drop to 1888.29 was the wave 4, and
the rally to 1895.96 completed wave 5. The SPX then moved lower in three waves.
Looking at the SPX from Monday’s 1886.00 high, I had counted the move to
1882.12 as an inverted corrective wave. It now appears that this was only wave
A of the corrective wave, with wave B completing at 1895.96. The three waves
lower then completed waves C, D, and E, and Wave 2 from 1886.00. The slight
move higher from that point unfolded in three waves, and looks to have
completed a 5 wave sequence from 1862.36 as
1886.00-1893.27-1895.97-1895.11-1896.33.
This market may continue in a somewhat choppy
fashion until it completes, but with several waves left to complete, the
potential for a sustained move higher have increased. A lot will depend on the
next several waves, and how they unfold. With a sequence completing today, a
pullback from these levels would be expected. A move lower to 1875 would
complete an inverted corrective wave from 1884.89, and Wave 2 from 1814.36. The
waves that follow that should tell a lot about how high this market may go.
The SPX is now in that 1891-1902
support/resistance level I have previously mentioned. Next support would be
1875, with resistance at 1923-1928.
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