It did not take the SPX long to choose between the
two paths I described on Tuesday. Wednesday the index opened decidedly to the
downside, confirming the inverted corrective wave that terminated at 1985.17.
The SPX continued lower from the open, falling to 1926.03 this morning with
only two noticeable bounces along the way.
Once the SPX had fallen to 1926.03 by late
morning, the first real attempt at a rally from the 1985.17 occurred. The index
climbed steadily through the remainder of the day reaching 1952.32 before
falling back slightly into the close.
I count nine waves from the 1985.17 high to the 1926.03
low. The first wave ended at 1968.96. The next five waves completed an inverted
corrective second wave, 1977.73-1954.30-1964.33-1945.44-1951.10. The next three
waves, 1934.82-1938.15-1926.03 then completed a 5 wave sequence.
Recalling the count from 2019.26, the SPX
completed the first wave at 1978.63. The index then completed an inverted corrective
wave at 1985.17. Notice that the end of this wave, 1985.17, completed above the
termination point of the first wave, 1978.63. Sometimes this indicates the
completion of only the first wave in an ongoing corrective wave. This may be a possibility
in this case, with 1985.17 being a wave a, and today’s 1926.03 low being wave
b. The short term count from 1926.03 indicates three waves, which would then
complete the entire second wave from 2019.26 at 1952.32. I am now looking for
three waves down to complete a 5 wave sequence from 2019.26.
My target for this initial decline from 2019.26 is
1917. This should complete with a move below 1932, a small bounce, and then a
final decline to 1917.
If 2019.26 was the end of a sequence from 1074.77,
several preliminary targets can be estimated. There a couple of interesting
possible scenarios that I will elaborate on as this wave unfolds. One of these scenarios suggests the SPX will
complete this wave above 1881. Should that level be broken to the downside, I
would look for a move below 1748.
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