I had thought that the SPX had put in a bottom
last Friday at 1974.37. That was not the case. After an afternoon rally on
Friday, the index failed to follow through on Monday, moving down sharply to
1967.31. A strong rally followed that drop, lifting the SPX to 1984.85. That
rally ended this morning, and the SPX moved lower once again, first to 197.53,
and then 1970.34.
My longer term view remains unchanged. The SPX, in
my view, still needs to complete several waves up to complete the sequence from
1074.77. The shorter term outlook is not as clear. The simple view would be to
see the move lower from Friday’s rally as part of an inverted corrective wave
from 1986.24. There are several very short term waves that have not been
resolved in my opinion, and so I am hesitant to be overwhelmingly bullish. For
several reasons I still think the SPX is in a complex corrective wave from
either 1986.24, or 1969.84, although it is likely that the index has put in the
low of this corrective wave.
It does appear that a wave completed today at
1970.34. The SPX should move higher at the open tomorrow, possibly to 1978. And
now that I’ve written all that, I have just seen a quite elegant solution. A
complex inverted corrective wave may have bottomed at 1970.34. If the SPX can
move above 1978, it should continue to rally.
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