Friday's Market 05/10/2013

Although the SPX tried mightily towards the close, it failed to reach a new time for the first time in what seems a month. The mettle of both the Bulls, and the Bars was tested today, as the market first looked like it was going to break lower, then looked like it was going to move into new high ground, but in the end did neither. It was a very interesting wave structure today; one we have seen before.

The market worked its way higher this morning, coming off yesterday’s decline. The SPX first hit 1630, pulled back to 1626, and then continued higher to 1632. From there the market sold off, dropping to 1625. A rally to 1630 followed, but that was met by more selling pressure, and the SPX fell back below 1624. A choppy uptrend followed, as the SPX worked up to 1630.28, just above the initial rally this morning to 1630.17. After a very minor pullback, the SPX rose sharply to the high of the day at 1633.47.

Those who have followed me have heard me talk about a semi-inverted corrective wave in the past, and I believe that is exactly what we saw today. Off of a low, this structure would have a move up for wave 1, and a pullback for wave a of 2 Wave b of 2 then exceeds the wave 1 high, with waves c, d, and e of 2 forming a zig-zag pattern that terminates below wave a of 2. Wave 3 then generally ends just above wave 1, with wave 4 being a small pullback. Wave 5 is then usually a sharp move higher. Looking at the wave structure from yesterday’s 1623 low, that is exactly what we had today. If you go back and look at the wave from 1357.38 following the 1422.38 high, you will see the same structure. That is not to say the eventual outcome will be the same. I do see 1635.01 as the completion of a 5 wave sequence from 1074.77, with my first support level at 1599.

Thank you.

Thursday's Market 05/09/2013

Another day, another all-time high. Again. But this one may be quite different from the others.

The market opened flat today, and then moved lower, with the SPX dropping to 1626.91.That dip was once again met with buying, and the SPX rallied to another all-time high. At that point the market experienced the deepest pullback since it started on this run. The SPX sold off into the support zone I mentioned yesterday, 1623, and then rallied to 1629 before falling back to 1623.09.

As of my count from yesterday, I had a 5 Wave sequence completed from 1581.28 at the high of 1632.78. We had a 5 wave sell-off to 1626.91, a 5 wave advance to 1635.01, and then a drop below 1626.91. That would mean that there were 3 sequences from the 1581.28 low. The best count would therefore be that we saw the completion of Waves 3, 4, and 5 from 1074.77 today.

While I had been expecting a minor correction, followed by new highs, before a major correction, the count from today suggests the major correction may be underway. If the SPX should rise above 1635.01, this count would be proved wrong, but until then I will operate under those assumptions.

Thank you.

Wednesday's Market 05/08/2013

The seemingly endless uptrend from 1581.28 continued today, with the SPX recording yet another record high.

After starting the day to the downside, and working down to 1622.70, the SPX then continued higher, reaching another all-time high at 1631.19. After a pullback to 1626.46, the SPX made one more new high towards the close at 1632.78.

Since the SPX hit 1618.46 last Friday, it has moved ever higher, with only minor pullbacks of 4 to 6 points. Support is at 1623, and 1607. The 1623 support level is interesting in that a move to that level could complete an inverted corrective wave from 1618.46. If that support holds, we could see the market move still higher before the sequence from 1581 finally completes. A level around 1645 would be a target if this were to materialize. I still see this as Wave 3 from 1074.77. When this wave does complete, we should see a minor correction, followed by another move higher before a larger correction.

Thank you.