The week started on a bearish note, with SPY gapping down Monday morning to 380.65. This set up a bullish divergence on the RSI(5) for both the 15 and 60 minute charts. The gap down was followed immediately by a reversal and a fill of that opening gap. The rally off that low continued into Tuesday, where a reversal to the downside carried into Wednesday, and brought SPY back down to 383.71. By mid-day Wednesday SPY was on the upswing again, lifting it to 396.47 just before Thursday's close. SPY finished the week with a gap down, and this time the bearish sentiment carried into the close. SPY closed the week at 390.12.
The current count from Monday's low has SPY in Wave D(Purple). This wave is itself sub-dividing, with an inverted corrective Wave 2 possibly having ended Friday. This would put SPY in Wave 3 of D. My working target for the completion of the wave Monday's Wave D low is above 404.
On the 60 Minute chart, we can follow the sequence from the 418.31 high. Wave 1 terminated at 407.57, and was followed by an inverted corrective Wave 2. This completed as (407.57, 416.49), (405.01, 415.05), (392.33, 407.45) with an R^2 value of .99992. Wave 3 then completed at 396.59. From that point, things became slightly more complicated. I have been counting the bounce off the Wave 3 low as having occurred in three waves, which would have a very bearish connotation as I discussed last weekend. Until SPY breaks above that high, which was 401.48, that bearish scenario is still in play. But if the current shorter term count plays out, that high will be exceeded, so there is an alternate count to consider.
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