Friday's Market 06/14/2013

The SPX opened lower today, falling to 1633.74 before trying to rally. The index rose to 1640.80 fairly quickly, but at that point the rally stalled. The SPX began to fall again, moving down to 1628.63 with barely a bounce. The index then traded in a choppy range, before once again moving lower, dropping to 1623.96. The SPX then rallied to 1631, dipped to 1626, then rallied again to 1632. After that the index slipped to 1625.13, before rising slightly into the close.

After the opening dip, the market rallied to 1640.80. This completed the move from yesterday’s 1608.07 low, moving slightly above yesterday’s high. I had mentioned that it was possible to move slightly higher, and this move still fits within the scenario I outlined yesterday. The drop to 1628.63 then completed a 5 Wave sequence from that high, which was followed by an inverted corrective wave to 1628.56. The move to 1623.96 then completed a higher degree sequence from 1640.80.

From there, it appears that the SPX moved higher in three waves, 1623.96-1630.51-1626.11-1631.55, which seemingly is the start of an inverted corrective wave. The SPX then completed a sequence to the downside, which finished slightly above the 1623.96 low.

It is still most likely that the SPX is in the third wave of a 5 Wave sequence that will complete near 1561. Support is at 1619, and then 1611. A move above 1648.69 would put this count in jeopardy, and a move above 1674.21 would invalidate it.

Thank you.

Thursday's Market 06/13/2013

You always have to love when the market throws you a curveball. After the dramatic decline yesterday, and everyone anticipating a further decline, the SPX opened slightly lower, and then headed virtually straight up.

After opening lower to 1608, the index headed higher after that, moving up to 1617 before pulling back. The next stop was 1619, and after a small pullback, 1625. Another small pullback followed, and then the SPX headed to 1639.25, with barely a pullback along the way. The index then dipped to 1635.87 shortly before the close.

The move down to 1608.07 completed a 5 Wave sequence from 1647.72, denoted by the blue “C” on the 5 minute chart, which I currently see as Wave D of 2. Because of the configuration of Waves A, B, and C, it allowed Wave E to be rather powerful, which indeed it was. This move still fits within my model’s parameters for a move lower to 1561. Wave 1 down completed at 1639.26, with today’s move higher possibly completing an inverted corrective Wave 2 from that point. Waves 3, 4, and 5 should then carry us down to the 1561 level.

Support would be at 1619, and then 1611. Should the next wave complete at 1619, there would most likely be a very small bounce before a drop to 1561. If Wave 3 moves to 1611, I would then expect a rebound to near 1623 before the move to 1561.

Although my current count would allow for a move to slightly higher levels, a move above 1648.69 would put my count in serious jeopardy, and a move above 1674.21 would mean that my current count is wrong. Given those facts it is prudent to explore the alternative at this point.

My current count calls for a move down near 1561, followed by a move higher. I would anticipate this move to fall short of the previous 1687.18 high, and be followed by another move lower, most likely carrying the market to new lows.

My alternate count would be that 1598.23 was the low of this move, and would be followed by a move to substantially higher levels. My minimum target for this count would be 1800. If the SPX moved above 1648.69, I would start considering this count, and if the index moved above 1674.21, this would most likely become my preferred count.

At the moment I still consider a move to 1561 the most likely, with support at 1619, and then 1611.

Thank you.

Tuesday's Market 06/11/2013

In Friday’s post I indicated my opinion was that the 1644.40 late afternoon high would be the extent of the move from 1598.23. The SPX did go on to make a slightly higher high at Monday’s open, rising to 1648.69 at the open, but it has been downhill ever since.

The SPX gapped down this morning, dropping to 1622.92, before starting to rally. That rally to reach yesterday’s close, stopping at 1640.13. From there the SPX stair stepped lower, until it reached 1636. After a small rebound, the selling accelerated, dropping the index back to 1626.99. After a seven point rally, the SPX fell again, this time falling to 1625.68 just before the close.

The wave action from the 1648.69 high has been fairly complex, but does not look like it has completed a 5 Wave sequence from that high. First support appears to be at 1617, followed by 1602. This entire sequence from 1648.69 should complete near 1561.

Thank you.