Tuesday's Market 07/09/2013

The SPX gapped up at the open today, quickly finding itself at the 1650 resistance level I mentioned yesterday. The index made it to 1649.90 before pulling back to 1643.93. After that low, the SPX spent the rest of the day moving progressively higher, interrupted by only very small pullbacks along the way. By the afternoon, the SPX had reached 1653.49, and by the end of the day 1654.18.

In yesterday’s post I indicated that two waves had now completed from 1604.57 low and possibly four waves of lesser degree by the end of yesterday. The extended move today from yesterday’s 1638.06 low completed a 5 wave sequence at 1653.49, and then a higher degree sequence at 1654.18. This most likely completes the third wave from the 1604.57 low.

The slight pull back at the end of the day may have completed the fourth wave, which would give a 5^th Wave target of 1666. At that point we could see a pullback similar to the 22 point move we saw from 1626.61 to 1604.57. As I mentioned yesterday, I still expect this market to move higher from that point.

Thank you.

Monday's Market 07/08/2013

The SPX started the day with another gap up open, rising above 1640 to start the day. After a brief three point pullback, the move higher continued in stair step fashion, with the SPX hitting 1642.28, and the 1644.68 after falling back to 1640.38. That turned out to be the high of the day, as the index slipped into a protracted pullback that took it down to 1637.01. The trading then turned choppy, with the SPX spending the remainder of the day trading in a trading range from that low to 1642.

This morning’s initial move up to 1644.68 appears to complete a single sequence from yesterday’s 1614.71 low. The first wave of this sequence ended at 1630.44, and was the most complex of the waves. The first 3 waves were straight forward, 1614.71-1619.20-1616.06-1621.51, but were then followed by an inverted corrective wave 4 which terminated at 1623.46. Wave 5 of this initial sequence then ended at 1630.44. From that point, the SPX pulled back to 1623.98. This pull back occurred in three waves, which became the first three waves of an inverted corrective wave 2. This wave completed today on the initial pullback to 1637.61. The entire sequence from 1614.71 then completed 1642.28-1640.38-1644.68.

From that 1644.68 high, the SPX pulled back in a 5 Wave sequence to 1637.01. Off that low, it looks like the index has complete 4 waves thus far.

Looking at the larger picture from the 1560.33 low, I believe the SPX completed a sequence higher at 1626.61, followed by a corrective sequence to 1604.57. A sequence of lesser degree then completed at 1627.06, and was followed by an inverted corrective wave that completed today at 1637.01. If this count proves correct, it would imply much higher prices, as the SPX would need to first complete the sequence from 1604.57, and then the sequence from 1560.33.

I would look for the market to move higher from here, with resistance at with my next target at 1658. Resistance is at 1650, and then 1675.

Weekend Outlook 07/07/2013

On Friday, the market continued the rally off Wednesday’s 1604.75 low. An opening gap up led to a 1627.01 high, and after a slight pullback, the SPX edged slightly higher to 1627.06. After that, the index suffered a pullback, dropping to 1614.71. After that the trading was mostly higher, if not a little choppy. A rally to 1621.51 was followed by a pullback to 1617.45. This, in turn, was followed by another rally to 1626.53, a pullback to 1623.46, another rally to 1630.44, another pullback to 1623.98, and finally a rally to 1632.07.

I had been targeting 1631, and the SPX moved right into that level. I had been targeting this level as the termination point of a 5 Wave sequence from 1560.33, but it appears more likely that the actual end point for that sequence was 1626.61. After the pullback to 1604-1605, the SPX completed a sequence higher to 1627.06, and may have completed another sequence Friday at 1630.44.

The market action from the 1560 low continues to look bullish, and is most likely the beginning of a new uptrend. The next resistance levels would appear to be around 1650, and then 1675.

Thank you.