In Wednesday's Update, I stated SPY had completed a 5 wave sequence from Wednesday's high, into the Wednesday afternoon low. I also gave supporting evidence for the 392.07 low as a likely stopping point, if only for the moment. I then said to expect a rally above 399.
SPY did open to the upside, and continued higher until just after 11:00am. This move completed in a 5 wave sequence, (392.07, 397.21), (396.29, 398.51), 398.11, 399.29), with an R^2 value of .993265. This sequence completed just over the 399 level I targeted, which would complete a Wave E of the alternate scenario I discussed yesterday, with yesterday's low being Wave D.
After reaching that high, SPY turned lower, completing a 5 wave sequence to the downside just before 3:00pm, just above 390. This sequence went (399.29, 397.13), (398.02, 394.75), (396.20, 390.54), with an R^2 value of .996803.
SPY rallied off that low, making back to 394.77. Another move lower to SPY to the low of the day at 390.35, before rallying again to 394.99 shortly before the close.
We seem to be at a critical juncture. A few scenarios point to another run up to near 400 from this point. If that plays out, we may indeed be in this narrow trading range a bit longer. A significant break below the 390 level probably points to a re-test of the lows.
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