Thursday's Market 08/16/12

A higher opening this morning lifted the market to 1408.65. From there, the market moved lower, dropping to 1404, before starting a prolonged rally that lasted into late afternoon. Once it broke back above 1408, the market continued on to 1410. After a minor pause, the rally resumed, moving the market to 1413, which was followed by another small pause. By late afternoon, the market stood at 1417.44. The market dropped back to 1414 near the close, before moving higher into the close.

Yesterday I said I was looking for the market to move initially to 1412, undergo a very slight pullback, and then continue on to 1418-1420. This was based on a 5 wave sequence from 1400.6 completing yesterday afternoon. That sequence actually ended this morning at the open, with wave 2 forming an inverted corrective wave, which carried the market to 1413.59, before the slight pullback to 1412.41. This altered the projection I gave yesterday slightly, but still very close. The 5 wave sequence from1400 then ended at today’s high of 1417.44. A 5 wave sequence to the downside from there has completed.

This now completes a 5 wave sequence from 1395.62, which I see as wave 1 of wave 5 from 1267. Having finally broken out of the narrow trading range it had been in, it now seems likely that wave 5 from 1267 will carry to 1497.

The next short term upside targets are 1421-1423, and 1427-1435. I have said before that the next move could be fairly swift, meaning the pullbacks could be minor. With that in mind, a 5 wave sequence completed today from 1417.44 to 1414.36, which also reached a support level based on the 1395-1417 sub-waves. The market could very well move higher from here.

Support for the corrective wave from 1417 should be 1414, 1411, 1407, 1402, and 1399.

Wednesday's Market 08/15/12

It was another seemingly lackluster day of trading. After rising yesterday from the 1400.60 wave 5 low, the market pulled back at the open today, falling to 1402. Then, what has passed for a rally the last several days ensued, carrying the market above 1406. The market then pulled back to 1403, before rising in choppy fashion back to 1406. Another pullback to 1404 was followed by another move higher to near 1408. From there the market moved lower once again to 1405 near the close.

This was another day spent in the narrow trading range the market has been in for almost two weeks since the move off the 1354.65 low. Although it has been a narrow range, it still appears to be forming in a bullish fashion. It still looks like 1391.74 was the wave 3 high from 1267. A complex corrective wave 4 followed, which ended at 1395.62. The wave structure from there is still incomplete, and could take several forms, but what I see right now has waves 1-4 completing at 1395.62-1405.98-1397.32-1410.03-1400.60. Today I believe we saw waves 1 and 2 of wave 5 from 1395.62. This should terminate near 1418-1420. This should be wave 1 of the sequence that may take the market to 1497.

I would look for the market to continue higher. The market should move to 1412, and after a very slight pullback, it should continue on to 1420. I continue to look at 1395.62 as the level that would put this scenario in jeopardy. If that level fails, the market could continue down to 1380.

Tuesday's Market 08/14/12

It was another opening gap to the upside this morning, with the market moving above 1410 early on. This was another new uptrend high, and it would also prove to be the high for the day. After dropping back to 1405, the market tried to rally once more, but this rally peaked at 1409.53. The market sold off for most of the rest of the day, with only a slight pause at 1405. This took the market back to 1400 before the market rallied back to near 1404 at the close.

In my weekend update I said I was looking for an initial move to 1410-1414. Although I was a day late, and the wave did not form exactly as I thought, that is the range the market hit today. I would say a 5 wave sequence terminated this morning at 1309.53, and then another sequence to the downside completed at 1400.60. I still see this as the beginning of wave 5 to the upside from 1267. If this plays out, the next target should be 1418-1420.

There is a possible count that makes today’s 1409.53 high the peak of a wave 5 from 1354.65. If this turns out to be the case, I would expect this corrective wave to terminate either near 1395, or 1385-1380. This would possibly change the projection of wave 5 from 1267 to 1426, instead of 1497.