The index did open sightly higher, making it to 2463.54 before reversing course, and falling slightly below Monday's low to 2367.04. The SPX quickly ran up to 2553.93 by midday. The move to a slightly lower low did change the resistance zone to an extent, but not significantly. 2553.93 put the index right within the 2537-2666 resistance zone I spoke of. Once hitting that zone the index pulled back to 2448.00, and then spent the rest of the afternoon trading between those two numbers.
So where does this leave us in my count? From the 3393.52 high, I am counting 2880.89 as Wave 1 of a five wave sequence. The SPX, in my view, has been forming an inverted corrective wave from that point, with 3136.72 being Wave A. Wave B ended at 2478.86, and the rally to 2710.89 as Wave C. Today's low of 2367.04 would be Wave D, and the subsequent rally to 2553.93 Wave E, completing Wave 2.
I realize that most people are not familiar with my terminology, so I will try to simplify it here, hopefully making where we are in my count clearer. The easiest way to think of it, would be to see each wave in my model as breaking down into 9 identifiable waves. There are a number of reasons why I label the waves as I do, with the main one being the relationships between waves. For those familiar with Elliott Wave counts, you can think of it as being a 1-2-1-2-3-4-3-4-5 sequence, which is 9 waves. In my model that would be labeled as 1-A-B-C-D-E(2)-3-4-5, with the A-B-C-D-E portion being what I call inverted corrective waves. So, 1-2-3-4-5-6-7-8-9, equates to 1-2-1-2-3-4-3-4-5 in Elliott Wave, which equates to 1-A-B-C-D-E(2)-3-4-5, in my 5 Wave Model. I count 5 wave sequences in both impulsive and corrective waves, so I won't equate it with Elliott Wave corrective counts. Obviously there are numerous variations for all of these, but that would be the simplest way to look at it. There are also many differences between my 5 Wave Model, and Elliot Wave, so this is only equating count sequences between the two for clarity.
So given that, if Wave E(2) completed today at 2553.93, it means the SPX has completed 6 of the 9 waves, with 7-8-9 to follow. I am currently still expecting this sequence to complete at my 2030 target level. The past few days I have been considering other possibilities, such as the SPX putting in a shorter term low, and undergoing a short term rally before moving down to 2030. That is still possible, but normally if that were to happen, it would occur either as "B" or "D" waves of the inverted corrective wave, or a smaller magnitude sequence would occurred.
Another reason for that conclusion is the relationships that form between waves. The 2030 target was based on the relationship between the 666.79 low, the 3393.52 high, and the intervening waves. The conclusion of this sequence will depend on the relationship between the first, third, and fifth waves of this sequence. But with Wave E(2) possibly completing today, I was able to look at several secondary relationships, and one of them confirms the 2030 number.
But I don't want to get too far ahead of myself. Let's stick to what we know. It does appear that today's low of 2367.04 was Wave D. But Wave E has not been confirmed yet, so a move above the resistance zone I mentioned yesterday would still negate this count.I will adjust the upper bound of that level to 2653 to take into account the new low. I also mentioned yesterday a possible alternate count. That is still a possibility, so if 2553.93 proves to be Wave E, the sequence from 3393.52 could complete under 2400, so a slightly lower low than today and rebound could bring this into play. Especially if we bounce off the bottom trend line, which looks to be around 2300.
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