Today was almost an exact duplicate of yesterday.
After a higher open, the SPX reversed course, dropping into negative territory.
After that the index reversed course once again, moving up to a new all time
high by late morning. After establishing that new high, the SPX drifted mostly
lower throughout the afternoon.
2 Day Chart:
The SPX is currently in Wave 5 from 1074.77 with a
minimum target of 1776, and an optimal target of 2041-2046. Wave 5 began at
1560.33.
4 Hour Chart:
This chart shows the progress of Wave 5 described
above. Four waves have completed, along with Waves 1, and 2 of 5. Wave 5 target
is between 1957 and 2064.
10 Minute Chart:
With Waves 1 and 2 completing at 1882.35 and
1952.86, this chart is tracking Wave 3 of 5 from 1952.86. Currently four waves
of Wave 3 have completed, with a Wave 5 target of 2003-2060, and an optimal
target of 2018.
5 Minute Chart:
Wave 4 of 3 completed at 1965.77. This chart
tracks Wave 5 of 3. As is shown on this chart, four waves of the 5 wave
sequence from 1965.77 have completed. The target for wave 5 is 1998-2008. This
chart is also tracking the progress of Wave 5. I am counting yesterday’s
1989.06 as the completion of Wave 1. I further identified yesterday afternoon’s
1984.81 low as either Wave 2, or Wave A of a more complex corrective Wave 2.
From that 1984.81 low, the SPX completed a 5 wave sequence at today’s 1991.39
high. Another 5 wave sequence followed, this time to the downside, and
completed at 1987.03. The index first moved higher to 1990.24, and then lower
to 1985.79, before moving higher into the close.
The 5 waves from the 1989.06 high can be seen as
1989.06-1984.81-1991.39-1987.03-1990.24-1985.79. The points (1989.06, 1984.91),
(1991.39, 1987.03), (1990.24, 1985.79), have an R^2 value of .994393, meaning
that this sequence counts as a complete sequence, and most likely Waves A, B,
C, D, and E of an inverted corrective Wave 2. There is one caveat to this; Wave
E (1985.79), did complete below the Wave 1 high (1989.06). In many instances of
the past several weeks this type of corrective wave has turned out to be only
Wave A of a larger corrective wave. If this is the case I would not be surprised
if the SPX moved slightly lower from here, but the decline should be similar in
size to Wave A, perhaps 3-5 points.
One other thing to keep in mind is that a similar
thing may be happening from the 1952.86 low as seen on the 10 Minute Chart. My
target for this wave is 2003-2060, while the target generated so far by Wave 5
of this sequence from 1965.77 is 1998-2008. The sequence from 1965.77 can
complete below 2003, which would not complete the sequence from 1952.86. If
this does happen, I would expect a decline similar to the ones seen between
Waves 1 and 2, and Waves 3 and 4, both of which were around 14 points. The SPX
will no doubt give us something to think about over the weekend.
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