Monday, October 20, 2014

Monday's Market 10/20/2014

The SPX started slightly to the downside today, dropping to 1882.30 at the open. The index then traded higher in choppy fashion until it reached 1896.60. At that point the SPX pulled back to 1891.55 before moving higher the rest of the day, topping out at 1905.03.


From Friday’s 1877.55 low the SPX completed a 5 wave sequence later that day at 1892.16. The drop this morning completed the first 3 waves of an inverted corrective wave that later completed at 1890.06. A quick move to 1895.97-1892.49-1896.60 then completed a larger degree sequence from the 1877.55 low.

This looks to have completed the third wave of a sequence from 1835.02. The pullback to 1891.55 looks to have been the fourth wave of this sequence, and the rise to 1905.03 then completed the fifth. This completes a sequence from the 1835.02 low. The SPX should decline from this point, with support near 1878.

Looking at the sequence from the 1820.66 low, the index completed the first wave at 1869.00, and has been forming an inverted corrective wave 2 since then. Today completed Wave B of that wave. Again, the SPX should now move lower, possibly to 1878. Whether that occurs as one wave or three will determine whether the index will decline further, or resume the move higher.




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