Monday, October 27, 2014

Monday's Market 10/27/2014

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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