Wednesday 04/01/2020

Sorry I missed posting last night. I try not to interject personal things or opinions into the blog, because my objective is to analyze the market as best I can. While the rest of Illinois is under a "stay at home" order, I happen to work for an "essential business", and so, luckily, or unluckily, still working. Not in the medical profession, so not one of the "heroes", but it has been busier than usual. So doing my best to keep myself safe, and more importantly, more "at risk"loved ones safe. Hope everyone is doing the same. All about priorities.

But enough of that. Numbers keep me sane, so let's get to that.

Picking up where I left off, I mentioned on Monday that the 2631.80 high on the SPX might have completed a 5 wave sequence from the 2520.02 low. On Tuesday the SPX did open slightly lower, but soon moved higher, topping out at 2641.39. This was slightly above Friday's 2637.01 high, and looked like it might be a breakout to the upside. However, the index quickly reversed course, dropping to 2588.90, recovering a bit, then dropping again to 2571.15 before staging a small recovery into the close.

This morning the SPX gapped down at the open, dropping to 2486.22. After a short-lived rally attempt, the index fell to 2466.99, rose to 2494.67, and then fell to the low of the day at 2447.49 near the close.

My count from the 2191.86 low remains intact. I had mentioned that the SPX may have to correct from the 5 wave sequence starting at 2360.25, and ending at 2637.01. The support levels I gave for this scenario were 2482 first, and then 2402. As I have mentioned, some of these support levels are a work in progress. The levels I mentioned were derived using 2360.25 as the initial point. I noticed tonight that by using 2191.86 as the initial point, it would give 2443 as the ideal level, fairly close to today's 2447.49 low. Something for me to take note of.

So continuing my count from the 2191.49 low, the SPX completed Wave 1 at 2300.73. After an inverted corrected wave from there to 2360.25, the index then completed a 5 wave sequence at 2637.01 for Wave 3. The entire move from that high to today's low of 2447.49 would be Wave 4. If correct, that would mean that the SPX is about to embark on Wave 5. Given the wave structure thus far, Wave 5 would project to between 2749 and 2889.

With the markets as they are, and everything going on, I feel it is as important, if not more so, to know when you are wrong, as when you are right. So in that vein, a drop below 2360.25 would invalidate the count. Otherwise I am looking for the SPX to move up to the 2749 - 2889 level.