Wednesday's Market 07/10/2013

It was another gap up open…….wait……there WAS NOT a gap up open. That is news in itself for this market. Although the SPX did not gap up, it did open to the upside once again. After hitting 1653.67, the index headed down, dropping to 1648.17. From there the SPX moved slightly higher, chopping its way to 1651.48. After a slight dip, the SPX headed sharply higher, reaching 1657.92. Almost as quickly the SPX dropped, taking out the previous daily low, and falling to 1647.66. A move to 1653.50 followed, and then a pull back to 1650.38 before rising into the close.

After yesterday, I was looking for one more move higher, to 1666, before a pull back. It now looks like I was slightly off. From the 1604.57 low, I had Wave 1 to 1627.06, followed by an inverted corrective wave that completed at 1637.01. I then had the move to 1654.18 as Wave 3. It now appears that only the first 3 waves of that inverted corrective wave completed. The third wave of that sequence ended at 1614.71. The entire move from that low to today’s 1657.92 high completed the fourth wave, with the subsequent drop to 1647.66 finally completing the sequence.

From here I am looking for the SPX to move higher, with the first move having the same target I gave yesterday, which was 1666. After that there should be a small pullback, and then one final move higher before a slightly larger pull back, most likely somewhere around 20 points.

The first wave of this sequence was just over 22 points, 1604.57 to 1627.06. The third wave, 1647.66 to 1666, would be around 20 points. Therefore, after the SPX hits 1666, and pulls back, I would expect Wave 5 to be of that same magnitude.  

Thank you.

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.