Tuesday's Market 01/28/2014

As of my last post, I was looking for a move to between 1828 and 1845 to complete a 5 wave sequence from the October 2011 low of 1074.77. My short term count turned out to be incorrect, as the SPX made a high of 1850.84. This high would seem to complete the aforementioned sequence.

From the 1074.77 low, my count has 1292.66-1158.66-1422.38 as the first three waves of the sequence. Wave 4 turned out to be an inverted corrective wave that completed at 1560.33. The recent 1850.84 high satisfies my model for the completion of this sequence.

From the 1560.33 Wave 4 low, I count 1709.36 as Wave 1 of 5. Wave 2 was an inverted corrective wave that completed at 1646.47. Wave 3 completed at 1774.54, and was then followed by Wave 4 at 1746.20. Once again, the 1850.84 high completes this sequence according to my model.

The sequence from 1746.20 proved to be the most challenging. The quick rise to 1773.44 was the first wave in this sequence. The small pullback to 1760.64 would ultimately be Wave A of an inverted corrective wave. Wave 1 of B completed at 1802.33, with Wave 2 of B turning out to be a semi-inverted corrective wave which completed at 1767.99. Waves 3, 4, and 5 of B then completed as 1811.08-1801.35-1849.44. From this point, the inverted corrective wave that started at 1773.44 could now finally complete, and it did at 1815.52. Following this rather extended sequence, Waves 3, and 5 then completed quite quickly at 1837.41-1834.14-1850.84. So the 1850.84 high completed a 5 wave sequence from 1746.20, which completed a sequence from 1560.33, which completed the entire sequence from 1074.77.

If this count proves to be correct, the SPX should continue lower, with a first target of 1679.

Counting from the 1850.84 high, I have a Wave 1 completing at 1835.23. The subsequent rise to 1849.31 would seem to be Wave A of an inverted corrective wave. Wave B carried the SPX sharply lower, completing a sequence as 1832.38-1846.87-1824.49-1828.50-1772.88. Wave C seems to have completed at 1793.64 and Wave D at 1779.49.

Given the sequence so far, I would be looking for Wave E and Wave 2 from the 1850.84 high, to complete near 1800-1801. After that I would look for another move to the downside, perhaps to 1744. After a bounce off this low, the stage should be set for a final move lower to 1679.

Wednesday's Market 11/27/2013

Taken in conjunction with today’s trading, I was likely mistaken on yesterday’s short term count. In this context the move from 1800.77 to 1808.42 looks to be a single 5 wave sequence. This would make the rise to 1805.32 from Monday’s 1800.58 low a wave 1. The drop to 1800.77 would then be wave A of an inverted corrective wave. Yesterday’s afternoon climb to 1808.42 and fall to 1802.97 would be waves B and C. Today the SPX moved higher off that low, completing a 5 wave sequence at 1808.27. A sequence lower followed, and completed at 1802.77. These are waves 4 and 5, thus completing the inverted corrective wave. Another rise to 1807.59 appears to be a lesser degree wave 1, which in itself was followed by an inverted corrective wave 2 which completed at 1807.04.

This count would suggest the SPX should break out to the upside, with my target remaining between 1828, and 1845. I am not ruling out one more push to the downside, but I see an upside breakout as more probable.

Have a Happy Thanksgiving, and be safe.

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.