Thursday, February 15, 2024

Thursday Update 02/15/2024

 The rally off Tuesday afternoon's low continued today, as SPY opened to the upside, and continued higher throughout the day. SPY opened with a small gap to the upside, and zeroed in on the 500 level first reached last Friday. Within the first half hour SPY did regain that level, if only momentarily. After hitting a high of 500.38 SPY turned lower. and fell to 498.80 just after 11:00, closing the opening gap. The "buy the dip" mentally took over once again, and SPY moved above 500 once again by 1:00. After one more dip just below the 500 level, SPY moved higher through the rest of the afternoon, hitting a high of 502.20. SPY then fell back towards the 501 area before rallying near the close, and ending the session at 502.01, just off the high of the day.


Our target remains the 517 level as the completion of a 5 wave sequence from the October 2022 lows.


We have been following the wave structure from the Wave 4 low which terminated on January 5,2024.


There seems to be 4 waves completed thus far from that low, which I've identified with the purple X's. If this completes as a simple 5 wave structure, the target to complete this wave, and therefore the entire sequence from the October 2022 low would be above 522, right in line with our longer term target. This wave could still take several forms from here, but we would expect that 517 area to remain the target level.

On the 15 Minute chart we can follow the structure from the last purple X above.


Once again we see four completed waves, denoted by the green X's. From the last wave we can see a Wave 1 to the upside, followed by an inverted corrective Wave 2. If this completes as a simple 5 wave structure, it would terminate near 504. This would not be sufficient to complete the higher wave sequence on the Hourly chart. If SPY does move significantly above 504, we could expect a more complicated wave structure, but would continue to target the 517 level. If 504 does hold here, we would expect another pullback of 9-10 points before resuming the uptrend.

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