Wednesday's Market 07/23/2014

The SPX gapped higher again this morning, but this time quickly reversed and closed the gap within the first twenty minutes of trading. The index reached 1987.46 before falling back to 1982.44. The rest of the morning saw the SPX moving higher, making it to 1989.23. A decline to 1984.81 followed, with the index rallying back to 1988.73 before the close.

2 Day Chart:

This chart shows the main wave from 1074.77 that I have been tracking. So far the SPX has completed four waves of the 5 Wave sequence. Wave 1 completed at 1292.66, Wave 2 at 1158.66, and Wave 3 at 1422.38. Wave 4 was an inverted corrective wave, which completed as 1422.38-1266.74-1474.51-1343.35-1687.18-1560.33. The points (1422.38, 1266.74), (1474.51, 1343.35), (1687.18-1560.33) give an R^2 value of .995468. Given the waves already completed, a Wave 5 target can be extrapolated. The minimum value for this target is 1776, which has already been surpassed, with an optimal target of 2041-2046. The range for this target is admittedly large, so tracking the smaller degree waves should help narrow the range.

4 Hour Chart:

As shown on the 2 Day Chart, Wave 4 from 1074.77 completed at 1560.33. The 4 Hour Chart picks up the count from that point. Once again, it appears that the SPX has completed four waves of this sequence. Wave 1 completed at 1709.36, with Wave 2 being an inverted corrective wave that completed at 1646.47. Wave 3 completed at 1850.84 and Wave 4 at 1737.92. Again, with four waves completed, a Wave 5 target can be generated. This target is 1957-2064. Additionally, from the Wave 4 low of 1737.92, Waves 1, and 2 of 5 have completed, at 1882.35, and 1952.86, with Wave 2 being a very complex inverted corrective wave.

10 Minute Chart:

1952.86 is then the starting point on the 10 Minute Chart. So far, this wave also has completed four waves. Wave 1 ended at 1969.84, and was followed by another complex corrective wave, this time a semi-inverted one, which completed at 1955.59. Waves 3 and 4 can be seen as completing at 1979.91, and 1965.77. The target arrived at for this sequence is 2003-2060, with an optimal value of 2018.

5 Minute Chart:

With Wave 4 on the 10 Minute Chart completing at 1965.77, the 5 Minute Chart shows the progress of the wave from that point. This wave has also completed 4 of the 5 waves at 1971.20-1973.37-1986.24-1981.27. This structure gives a target for Wave 5 of between 1998 and 2008. When this wave completes, it will mark the end of the third wave from 1937.92 as seen on the 4 Hour Chart. I would then expect another shallow decline for Wave 4 and then one final move higher for Wave 5. This should complete the entire sequence from 1074.77 as seen on the 2 Day chart.