Wednesday, July 30, 2014

Tuesday's Market 07/29/2014

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.

Charts of the Day:



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