Tuesday's Market 11/26/2013

This morning the SPX continued to move higher off yesterday afternoon’s 1800.58 low. The index made it above 1805, and then turned lower, just barely staying above that low at 1800.77. These would turn out to be waves 1, and A of a 5 wave sequence to the upside. The SPX then spent much of the rest of the day completing wave B of the inverted corrective wave 2. This wave formed 5 distinct lower degree waves, with the first carrying the index to 1805.27. After a 2 point pullback, the SPX moved to almost 1807. Following another small pullback the index completed the 5^th wave of wave B at 1807.79. The SPX then pulled back to 1806, rose to 1808, and then pulled back to 1807. These formed waves C, D, and E of the inverted corrective wave, and wave 2 from yesterday’s low. Quick moves to 1808.30, 1807.95, and 1808.42 completed the sequence at a new all time high. After spending most of the day trying to move higher, the SPX gave back almost all of its gains in the last half hour, dropping from 1808.42 to 1802.97. This appears to have completed in a 5 wave sequence.

Although the SPX finished little changed from yesterday, it still appears that yesterday’s low marked the end of wave 4 from 1746.20, with today forming waves 1 and at least part of 2 of a the final 5 wave sequence. As I mentioned yesterday, the index could still move lower, to perhaps 1783 without affecting the 1828 final target.

I am still looking for a high between 1828 and 1845 to complete a 5 wave sequence from 1074.77.

Monday's Market 11/25/2013

The market opened this holiday week with a gap higher to a new all time high. The holiday mood was short-lived, as the SPX moved down from that early morning high, and never recovered. The index completed three waves down from that high at 1803.89, and then tried to recover. With an hour and a half of trading left, the SPX clawed back to 1807.47, but then quickly moved to new daily lows at 1800.58 before recovering slightly into the close.

From last Wednesday’s 1777.23 low, the SPX had completed four waves of a 5 wave sequence to the upside last Friday. The gap open to 1808.10 completed the fifth wave. Today the index completed a sequence down from that low.

Widening out to the bigger picture, my count has the SPX now in wave 5 from the October 2011 low of 1074.77. Wave 4 of this sequence completed at 1560.33. From 1560, the index has also completed 4 waves, with that wave completing at 1746.20. From that low, the SPX completed the third wave today at 1808.10, and possibly the 4^th wave at today’s low of 1800.58.

I have been targeting this wave to complete above 1828, and so far nothing has occurred to change that. In fact, if today’s low was wave 4, the target for wave 5 would be between 1828 and 1845. It is still possible for the index to move lower, possibly to 1789, with the 1828 remaining intact.

My expectation is the SPX should put in a bottom between here and 1789, and then make one more move higher to between 1828 and 1845. That should complete a 5 wave sequence from the 1074.77 low. 

Thursday's Market 11/21/2013

The pullback of the previous three days was all but erased today, as the SPX gapped higher at the open, and barely looked back. Yesterday I said that inverted corrective wave had completed at the 1773.23 low, suggesting a move higher. Just as decline yesterday was foreshadowed by a nested inverted corrective wave scenario, the set up for today’s rally began in the last hour of trading yesterday. From that low, the index formed a small 5 wave sequence to 1780.95. After a small pullback, the SPX formed another small wave higher, followed by three small waves lower. This formed a 1-2-3-4-5(1)-A-1-A-B-C sequence. The sharp rise this morning completed wave D, and the small pullback that followed, wave E, completing the first inverted corrective wave, and wave 2. Three more waves to the upside, 1790.61-1789.34-1793.38, completed waves 3, 4, and 5, and in turn wave B of the initial inverted corrective wave that began yesterday. A swift three wave decline followed, completing waves C, D, and E, which completed that initial corrective wave, and wave 2 from yesterday’s 1773.23 low.  Three quick moves higher completed the sequence from the low at 1793.71, right at the 1794 resistance level.

After reaching that resistance level, the SPX underwent the largest pullback of the day, all of 3 points. This decline occurred in three waves, suggesting another inverted corrective wave was underway. After pulling back to 1790.60, the index began to rise again. The rally from 1790.60 eventually carried the index to 1797.16. This was a 5 wave sequence with an inverted corrective wave 2. Wave D of this corrective wave lifted the SPX to 1795.71, with wave E testing that 1794 support at 1794.10. After reaching 1797.16, the index pulled back again, this time to 1794.35. This would be within the range of completing the inverted corrective wave from 1793.71, and wave 2 of a sequence higher.

I am looking for this sequence from 1773.23 to complete somewhere above 1803. This would complete the third wave from 1746.20 low, and after a brief pull pack would then project wave 5 above 1828.