It certainly appears that Thursday’s 1952.86 low
marked the end of the recent decline from 1985.59. If this count remains
intact, it means that the SPX has completed the inverted corrective Wave 2 from
1737.92, and is now in Wave 3 as I discussed last week. When the index
completes Wave 5 of this sequence it will complete the entire sequence from the
October 2011 1074.77 low.
After falling to 1952.86 last Thursday, the SPX
staged a rally to 1969.84, and then traded in a narrow range through the end of
last week. The index appears to have formed a series of nested waves that
eventually resulted in the gap up this morning and the ensuing rally to
1979.85. After reaching that high mark, the SPX then traded in a very narrow
range for the rest of the day between that high and 1976.22.
The 5 Minute Chart shows the nested waves, which
by my count contain four degrees of waves from the 1952.86 low. The first
degree wave was the initial rally to 1969.84. The pullback from that high now
appears to be three waves of an ongoing inverted corrective wave. Following a lower opening on Friday to
complete that 3rd wave, a lesser degree Wave 1 formed, which was
followed by a small pullback. The SPX went on to form two more lesser degree
Wave 1’s, and then began to unwind all those nested waves. At this point it
appears there is still more upside potential with the SPX now in Wave D of 2
from the 1952.86 low. Wave D should complete near 1991(1985-2002), which should
then be followed by a pullback greater than 8 points to complete Wave 2. The
index should then continue higher as it completes Waves 3, 4, and 5.
From this point the SPX should move higher to 1991
+/-, pull back 8+ points, and then continue higher.
No comments:
Post a Comment