Wednesday's Market 09/30/2015

It has been an interesting couple of days following Monday’s steep move to the downside.  After Friday’s 1935.32 high the SPX broke sharply lower on Monday completing a 5 wave sequence at 1880.38. The choppy trading after that low looked to be the start of an inverted corrective wave, but turned out to be the another formation of the favored wave of this correction, the semi-inverted corrective wave. This wave completed at 1899.48. The index then moved lower once again, falling to 1871.91 in what can be counted as 5 waves, with the second once again turning out to be a semi-inverted corrective wave. From that low the SPX moved slightly higher to 1880.85 before a slight pullback into Monday’s close. Notice that the bounce to 1880.85 was slightly above the initial 1880.38 low from 1935.32.

So since 1935.32 the market fell in 5 waves to 1880.38, rallied in 5 waves to 1899.48, fell in 5 waves to 1871.91, and then rallied to 1880.85. From 1880.85 the SPX had a small pullback, and then rallied sharply this morning, moving up to 1914.31. The index then underwent another semi-inverted corrective wave to 1900.65, rallied to 1904.37, and the fell to 1897.05. Notice again that 1897.05 is slightly below the initial rally from 1880.38 to 1899.48.

 

Again from 1935.32 the SPX moved lower to 1880.38, rallied to 1899.48, and then fell below the initial low to 1871.91. After that the index rallied 1880.85, which is between 1880.38 and 1899.48, and then formed an inverted corrective wave which terminated at 1897.05 which is once again between 1880.38 and 1899.48. So from the 1880.38 low the SPX has completed Waves A, B, C, and D of another semi-inverted corrective wave. Wave E would have a target above 1925, slightly above today’s closing level. Notice that this is also slightly above 1921.50 which I have labeled as Wave (C). If this wave does end between 1921.50 and 1935.32, it would appear that the SPX is forming yet another semi-inverted corrective wave from 1921.50, and thus the index would still be in Wave (D). If true the SPX should then complete a corrective wave within the 1921.50-1935.32 range, and then move above 1935.32 to complete that wave. At the moment it looks like the wave would complete only slightly above that 1935.32 level. That would then complete Wave (D) and clear the way for Wave (E) to begin.