Wednesday's Market 04/17/2013

It has been fairly apparent that my count from SPX 1358 has not been correct. I had been counting the move from 1563.62 to 1538.57 as the completion of Waves 3, 4, and 5 from 1370.58. I was then expecting Waves 3, 4, and 5 higher to complete the sequence from 666.79.

From 1538.57 I counted three waves up to 1573.66 (1538.57-1564.91-1546.22-1573.66), three waves down to 1540.29 (1573.66-1549.80-1562.60-1540.29, three waves up (1540.29-1573.89-1567.97-1597.35). All of these three wave sequences, without completing a 5 Wave sequence, is quite unexpected. The action from 1563.62 has been more reminiscent of the unwinding of inverted corrective waves. It is now my opinion that the move from the 1074.77 low has contained many more nested waves than I originally thought. Waves 1, 2, 3, and 4 as labeled in pink on my Daily and Weekly chart now appear to be a series of nested ones. The current move lower from the 1597.35 high should be waves 3, 4, and 5 from 1292.66 (Pink Wave 1). Once this sequence has completed, the market would need to move higher to complete the sequence from 1074.77. This would be followed by a correction to complete the inverted corrective sequence from 1370.58, and another move higher to complete the sequence from 666.79.

Today the market gapped lower, falling to 1558 before attempting a rally. That attempt did not last long, as the SPX worked its way lower, finally settling at 1543.69. At that point the market did move higher, rising to 1555 before settling back into the close.

The SPX completed a 5 Wave sequence from 1575.38 at 1546.08, which became Wave 1 of a larger degree sequence. After a move higher to 1551.93, the market fell to 1543.69, to complete this higher degree sequence. The market then moved higher, and completed a 4 Wave sequence at 1555.15.

From 1597.35 the market has completed three 5 Wave sequences, 1597.35-1552.58-1575.35-1543.69. There are several possibilities at this point. If the market moves lower at the open, a drop to 1535 would complete a 5 Wave sequence from 1597.35. I would then expect a move higher, followed by one more move lower. If the market continues to rally off today’s low, I would expect it not to exceed 1575, and be followed by another move lower to 1530-1485. If the market moves below 1530 at the open, the SPX should bottom above 1485, with that being the low from 1597.35, and the beginning of the next rally.

Thank you.

Tuesday's Market 04/16/2013

In the past week, the market has gone up thirty points, dropped forty-five, and up twenty-three. There is a very interesting count developing which could bring us right back where we were a week ago, and with the same target; 1619.

The market opened markedly higher today, in sharp contrast to the action from yesterday. The market popped above 1563, and the quickly found itself at 1566. The market then began to fall back, dropping to 1559.93 before regaining its footing. The rally then continued, as the SPX ran up to 1573.03 with only minor pullbacks. After hitting 1573, the market fell back once again. But a drop to 1567.64 was soon followed by a rally to a new intra-day high at 1575.35.

Yesterday I said the market had completed a 5 Wave sequence to the downside, and a move above 1559 would signal a resumption of the move higher. With the market opening above that level at today’s open, that remains the strongest possibility. The SPX completed Waves 1, 2, and 3 of a 5 wave advance today. The opening pop to 1566.22 was Wave 1. Wave 2 was an inverted corrective wave, with Waves 1, 2, and 3 completing at 1559.93. Wave 4 was then the more powerful move to 1573.03, and was followed by Wave 5 at 1567.64, to complete Wave 2 from 1552.58. The rally into the close at the moment appears to be Wave 3 of that sequence. It is possible that Wave 4 completed with the slight dip into the close. If it did Wave 5 should complete at 1579-1580.

With the current structure of today’s partially completed wave, it would appear to be a corrective wave as opposed to an impulsive one, which becomes problematical if the market is to move higher. The market may be able to rectify this seeming inconsistency however. If the SPX completes this sequence at 1579-1580, there should be support near 1565. The sequence 1573.89-1567.97-1597.35-1552.58-1579-1565 would actually complete a 5 wave corrective sequence from 1573.89. That would complete Wave 4 from 1538.57, and give a target for Wave 5 of 1619 once again. It would be extremely unusual for a wave to form in this fashion, but this has been a very unusual market for some time.

I still consider the market to be up trending from the 1538.57 low. An open above the 1580 level would seem to confirm this. My first target would be the 1598-1612 area. If the SPX drops below 1538.57 I will consider this uptrend to be over.

Thank you.

Monday's Market 04/15/2013

The first part of today’s move to the downside was expected, the second quite unexpected.

The market gapped lower at the open today, falling to 1578.97, just as I had mentioned this weekend. After making several slightly lower lows to 1575.31 the market attempted to rally. At this point I had expected the market to resume its uptrend, but it was quite the opposite that actually happened. After breaking through the previous low, the SPX fell precipitously, dropping to throughout the day, and closing on the low at 1552.58.

It looks like the SPX has completed a 5 Wave sequence from 1597.35 at this point. This calls into question my count from the 1538.57 low. The count rests on whether the move from 1540.29 to 1597.35 consisted of two 5 Wave sequences, or one. There is a count that shows it completing two sequences, and a 5 Wave sequence from 1538.57. That would make 1597.35 the termination point of Wave 3 from the 666.79 low, and today’s move lower as most likely Wave 3. Another move higher to the 1600 area would then complete the sequence.

If that move consisted of one wave, it would make 1597.35 Wave 3 from 1538.57, and this Wave 4. Wave 5 would then project much higher than 1600, and complete Wave 3 from 666.79. This would then be followed by Waves 4, and 5.

One of the reasons I have rejected the 1540.29 to 1597.35 move as one sequence up until this point has been the high target that it would lead to. At this point I will have to keep that option open.

I would look for a move above 1559 to signal another move to the upside, with a target near 1600.

If the SPX should fall below 1538.57, a 5 Wave sequence from 666.79 has most likely completed.

Thank you.