It has been an interesting couple of weeks since
the SPX hit an all time high of 2019.26 on September 19th. The
decline from that high began innocuously enough, with the index dropping to
1978.63. I am counting this as the first wave of a 5 wave sequence. The second
wave unfolded as an inverted corrective wave,
1993.63-1966.22-1986.37-1964.04-1985.17. From 1985.17 the SPX declined sharply
to 1926.03 and was followed just as quickly with a bounce back to 1977.84.
Another sharp decline followed, this time to 1925.25. This again was followed
by another swift bounce to 1970.36 yesterday.
I am counting the decline to 1926.03 as the third
wave down from 2019.26, and the bounce to 1977.84 as the fourth wave. This
count gives a target of between 1921 and 1907, with an optimal value of 1915
for the fifth wave.
While this could still go in several directions, I
am looking for a move lower to 1918+/- to complete wave 3 of E. This should be
followed by a bounce, maybe to 1930, and then a final move lower to 1915+/- to
complete a 5 wave sequence from 2019.26. There is a chance the advance from
there could be surprisingly strong.
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