The SPX responded to yesterday’s weakness with a
gap up opening, which took the index back to 1876.01 within the first few
minutes of trading. A sharp reversal followed, and the SPX soon found itself in
negative territory for the day. This downturn took the index to 1859.79, which
turned out to be the low of the day. The SPX started to move higher once again,
hitting 1869.12 before taking a pause. After pulling back to 1865.29 the index
then continued higher to 1876.46. A choppy pullback followed, this time taking
the SPX to 1868.43 where it reversed again, and then moved higher into the
close with only one four point pullback along the way.
Continuing the count from the recent 1891.33 high,
I have Wave 2 completing on Monday at 1885.51. Wave 1 of 3 then completed
yesterday at 1876.03, and what looks like Wave 2 of 3 at 1881.27. Wave 3 of 3 then
completed at yesterday’s low of 1867.77. That would make today’s opening move
higher to 1876.01 Wave 4 of 3, and the ensuing drop Wave 5 of 3, which I have
completing at 1861.10. This now completes three waves from 1891.33.
From 1861.10, a 5 wave sequence can be counted as
1869.12-1868.43-1875.37-1871.75-1878.83. The second wave was an inverted
corrective wave which completed as 1865.29-1875.52-1869.61-1873.99-1868.43.
This would now seem to complete four waves from 1891.33, with only the fifth
wave down to come.
With four waves now completed, the fifth wave should
complete between 1844 and 1830, with an optimal target of 1838. If the SPX does
move higher, resistance is between 1891 and 1902. After 1902 the next
resistance would be 1923.
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