Tuesday 03/24/2020

Going into today's trading, I had viewed yesterday's 2191.86 low as wave d of a 5 wave sequence, looking for wave e to then terminate between 2389 and 2409. The SPX opened significantly higher, reaching 2387.98 within the first hour, which was just below that range. The index continued higher, moving into that range, but then moving above it to 2436.88. After a small pullback, the SPX moved higher into the close, topping out at 2449.71.

As I indicated yesterday, a move above 2409 wold invalidate the short term count I was following, and point to something else going on. So I have had to re-evaluate the wave count. Several days ago I had mentioned an alternate count in which the SPX was in the final wave of a sequence from 3393.52. That count is still in play, however there is not a clear 5 wave sequence from Wave E (2553.93) to the 2191.86 low.

The other possibility at the moment is to look at the move from Wave C (2710.89) to the 2191.86 low as a 5 wave sequence, making 2191.86 Wave D, and not 2367.04. There is a possible 5 wave count for that move. Wave E is then possibly on the way, with the SPX moving into a range that would complete that sequence today. Technically this also fits, with Waves A and C of the sequence touching overbought. Looking at 2553.93, or what I originally have labeled as Wave E, you will notice the RSI does not hit overbought. Today's move did bring the index up to that level. The upper bound for this count is 2503. This would be the highest point the SPX could reach and still satisfy my model.

So it looks like a move above 2503 makes 2191.86 the completion of a 5 wave sequence form 3393.52, and at least a short term bottom. Until that level is exceeded, another move lower is still possible.