This week saw a continuation of the rally that has seemingly been non-stop since the October 27,2023 low of 409.21. Monday saw an early pullback of about 4 points from Friday's close, but reversed off the 490.23 low, closing down only slightly. Tuesday saw some continued consolidation as SPY traded in a narrow range between 492 and 495. Wednesday saw the SPY eclipsing Friday's close, with a strong gap up, and continued strength during the remainder of the day that brought SPY within shouting distance of the 500 level. Thursday was another narrow range day, as SPY consolidated just under the 500 level. SPY moved higher again on Friday, and finally did rise above the seemingly inevitable 500 mark. That level then provided support, and SPY closed out the week at 501.20.
On the Daily Chart we can see the 5 wave structure taking shape off the October 13,2022 low of 348.11. The initial rise off the low was choppy, but did complete a 5 wave sequence higher into the February 418.31 high. SPY pulled back into March, but then showed a stronger leg up into July. The market then declined into the end of October, and we can see this as the completion of an inverted corrective wave from the 418.31 high. This would mean that 2 waves of the 5 waves completed at that point. Wave 3 looks to have completed in December, with the slight pullback at the beginning of this year completing Wave 4.
With four waves completed, we can make some projections for the completion of this wave. Given the current count, Wave 5 should complete between 517, and 556. We will be keeping an eye on the 15 and 60 Minute charts to help narrow down that range as we move closer. We will also be looking at some projections for how deep the correction may be.
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