The SPX started the morning by moving higher, in
line with my analysis from yesterday. It appears the index did complete the
sequence from 1959.63 as I had expected, although it was short of the 1991
level I had mentioned. That target was derived using a secondary technique,
which is sometimes less accurate, so the 1982.52 high was acceptable. The SPX
began to move lower from that point, and moved down to 1968.91 with only minor
bounces. This was within the range to complete the inverted corrective wave
from 1969.84, and the source of my call for an 8+ point pullback; however it
did not reach this point with a complete 5 wave sequence. Instead, the SPX
continued to fall to 1965.34 before completing the sequence, which was beyond
the range to complete the inverted corrective wave. After completing that
sequence, the index completed a sequence to the upside, bouncing back to
1976.16 before fading into the close.
Since it appears that the SPX has completed a
sequence from 1959.63, but failed to complete the inverted corrective wave, today’s
1982.52 cannot be Wave D from 1969.84 as I anticipated, but more likely only
Wave 1 of D. This would indicate higher levels for the SPX can be expected. If
the SPX falls below 1959.63 at this point it would likely mean that the decline
from 1985.59 is not over.
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