Friday's Market 09/14/12

The market continued in rally mode this morning, powering to another uptrend high at 1474.51. After that high, the market corrected, falling to 1461.54 near the close.

At 1474.51, the market completed a 5 wave sequence from Monday’s 1429 low, and the ensuing correction unfolded in a 5 wave sequence terminating at 1461.54.

 

The most likely scenario at the moment is that an inverted corrective wave 2 is unfolding from the 1438.74 high. Three waves of this corrective sequence appear to have formed, with my target for wave 4 being the 1497 level. Another corrective wave, probably only slightly longer than today’s 13 point correction should follow, and complete wave 5 of that inverted wave. After that the market should continue higher to near 1560.

 

Tuesday's Market 09/11/12

As expected, the market moved above 1430 this morning, and a fairly sharp rally ensued. This rally played out in a 5 wave sequence that lifted the market back to 1437.76. From that point, the market formed a 5 wave sequence to the downside, which brought the market back down to 1432.

Support remains at 1426, and then 1397-1387. If the market falls below 1432 at this point, I further correction may be at hand. My next upside target continues to be 1497.

 

Monday's Market 09/10/12

On Friday, the market completed a 5 wave sequence from 1396.56, at 1437.80. After opening slightly higher today, the market moved lower to 1435, and the rose to a new uptrend high at 1438.74. This completed another 5 wave sequence from the 1396.56 low, and most likely marked the end of the 5 wave sequence from 1467. After the new high, the market moved lower, dropping to 1435.54, and then tried to move higher, but stalled at 1437.48. Once the market dropped below 1435 once again, the selling increased, dropping the market to the low of the day at 1429. Today’s move lower unfolded in a series of 5 wave sequences with diminishing wave lengths, which generally means the end of that move is imminent.

 

It is quite possible that the move to 1429 completed the corrective move, and if the market can move above 1430, we should see a fairly sharp rally. If we see anything other than slightly lower lows, this correction could have further to go. Support is at 1426, and if that level doesn’t hold, 1387-1397 is the next level of support.

If the market can rally to new highs, the move to 1497 may be underway.