The SPX gapped higher this morning,
reaching 1965.52 within the first half hour, and then continuing higher to
1975.01. This completed a 5 wave sequence from yesterday’s 1919.64 Wave [d] low. This sequence completed as 1919.64-1931.59-1920.29-1938.03-1929.00-1975.01
within the 1961.1989 range I mentioned yesterday for Wave [e]. From that point the SPX moved lower to 1963.73,
and had a minor bounce to 1966.73. I have labeled these as a Wave 1, followed by
Wave A. The index then completed a sequence lower to 1947.84 as
1966.73-1958.05-1961.75-1951.16-1959.34-1947.84, for Wave B. A more substantial
bounce to 1958.87 which completed Wave C. One more move lower to 1944.72
completed Wave D, and the bounce near the close to 1956.28 Wave E and Wave 2
from today’s high.
Putting this all into context, this
morning’s rise to 1975.01 completed Wave [e], and
as I discussed yesterday Wave (D). This would
mean that the SPX is now poised to make the next move lower towards my 1748
minimum target to complete the corrective wave from 2019.26 as seen on the
daily chart. The implication of this afternoon’s drop, a Wave 1 followed by an
inverted corrective Wave 2, is that this initial move lower has not completed,
and the SPX should continue lower from this point.
Again as discussed yesterday, unless
1993.48 is broken to the upside, the SPX should head lower to below 1748. If
Wave (D) did complete today, the first 4 waves
of the sequence can now be used to project Wave (E). Those
waves from the 2019.26 high, 2019.26-1820.66-2079.46-1972.56-1975.01 indicate
that the termination point should be below 1744. This agrees quite well with
the 1748 projection given by the first 4 waves of the inverted corrective wave
from 1219.80, 1219.80-1010.91-1370.58-1074.77-2019.26.
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