Friday's Market 04/19/2013

In yesterday’s post I said I would be looking for a continuation of the rally off the 1536.03 low, with a target of 1561. After an opening dip to 1539.40, the market moved higher, topping at 1555.89.

From the opening dip, the market turned higher, reaching 1547.68, and then falling back to 1541.91. Another move to the upside carried the SPX to 1549.63, but was followed by a quick move back to 1545.86. After that the market was able to sustain a longer rally to 1554.87. The market followed that by giving back half of that gain, before rising into the close, and hitting a high of 1555.89.

The rally from the 1536.03 low, to yesterday afternoon’s 1544.01 high, completed a 5 Wave sequence. 1544.01 then became Wave 1 of a larger degree sequence that was completed at 1549.63, at the end of the choppy trading that marked the start of the session. The subsequent drop to 1545.86 formed Wave 2, and was followed by the more sustained rally into the midday hour, which completed Wave 3. The market then pulled back to 1549.48, and completed Wave 4. Wave 5 then completed near the close of trading at 1555.89.

I had been expecting a move to 1561 off Thursday’s low, and the market fell short of that mark today. With a 5 Wave sequence now completed off the 1536.03 low, it is likely that this upside move is over, and that the market will resume its move to the downside. If 1555.89 was the high of this move, it would lower my targets for the downside move to between 1495, and 1448.

I will elaborate on this over the weekend.

Thank you.

Thursday's Market 04/18/2013

In yesterday’s post I said the SPX had completed three 5 Wave sequences from 1597.35, 1552.58-1575.35-1543.69, and possibly a fourth sequence at 1555.15. I said that if the market moved down to 1535, it would complete a 5 Wave sequence from the high, and that I would then expect a rally. Late this afternoon the SPX hit a low of 1536.03.

The market opened slightly higher this morning, but did not exceed yesterday’s high. Soon the market continued to the downside, falling to 1541.40. The SPX then rallied to 1552, and then spent most of the remainder of the day trading within that range. By mid-afternoon the market started heading lower again, hitting the 1536.03 low, before rallying towards the close.

It does appear that Wave 4 from 1597.35 did complete yesterday afternoon at 1555.15. The market from there completed a 5 Wave sequence into today’s low, 1555.15-1541.40-1552.17-1539.46-1542.37-1536.03. This sequence terminated within the range target for Wave 5 from 1597. Therefore it is most likely that a sequence has completed at this point, and a rally should come next. A likely target for this correction should be around 1561. From there I would expect another move down near 1500.

Thank you.

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.