The SPX has been rallying since it hit a low of
1820.66 on October 15th. The index made an initial move to 1869.00,
which I am counting as Wave 1 of a 5 wave sequence to the upside. From there the SPX pulled back to 1835.02.
This looks to be Wave A of an inverted corrective Wave 2. As is often the case,
Wave B of this inverted corrective wave has been the most powerful to this
point. This wave carried the SPX up to 1949.31. Another pullback to 1926.83
followed which I have labeled Wave C of 2. Wave D is currently underway, with a
target of 1975. After this wave completes, the SPX should pill back once more
to complete Wave E, and the inverted corrective Wave 2. This pullback should be
proportional to the first two pullbacks, with the first being 34 points, and
the second 22 points. This last pullback
should therefore be slightly less than 22 points, and I currently have a target
of 1956. After that the SPX should move higher to complete Waves 3, 4, and 5.
Shorter term, the SPX from the 1926.83 low
completed the first wave at 1961.95. Wave 2 completed this morning at 1951.37. I
am looking for Wave 3 to complete at 1970, Wave 4 at 1967, and Wave 5 at 1975.
If this plays out, the move lower to 1956 discussed above would follow.
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