While the SPX did not move higher today as I had
anticipated, my overall outlook that the index will soon make new all time
highs remains unchanged.
The SPX started of lower this morning, falling to
1965.77 within the first hour and a half.
Once again, after that initial drop, the index spent the rest of the day
in recovery mode, climbing back to 1975.83 before dipping into the close.
Obviously my short term count from Friday was
incorrect, as the SPX did not move higher at the outset. Friday’s bounce from
1955.59 to 1979.91 now looks to be a simple 5 wave sequence to the upside,
which was followed by a sequence lower this morning to 1965.77. My 10 Minute
Chart shows the entire wave thus far from the 1952.86 low. Friday’s 1979.91
high can be seen as Wave 3, with today’s decline Wave 4. Wave 5 looks to be underway
from 1965.77. So far it looks like the SPX has completed a Wave 1, followed by
an inverted corrective Wave 2. If so, the index should now move higher to
complete Waves 3, 4, and 5.
With the wave structure so far, Wave 5 from
1952.86 should complete above 2003, with an optimal target of 2018. Once this
wave has completed, the SPX should undergo another shallow decline, followed by
one more move to new highs. This would complete the entire sequence from
1074.77.
Short term resistance is at 1981 and then
1990-1999. Support is at 1961-1962. I am looking for the SPX to move higher,
with a target as of now above 2003.
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