Thursday's Market 09/25/2014

Last Friday morning the SPX touched 2019.26, which almost likely completed a 5 wave sequence from 1560.33, and possibly a sequence from 1074.77, all of which I have been mentioning for several days. It is far too early to call the rise from 1074.77 over, so it remains best to take this one wave at a time. After hitting 2019.26, the SPX declined into Wednesday morning completing a 5 wave sequence at 1978.63. After completing that sequence, the index staged a rally into Wednesday’s close, once again completing a 5 wave sequence at the high of 1999.79. That indicated at least a pullback for today, which turned out to be an understatement.

The SPX dropped precipitously at the outset, dropping to 1970.41. This turned out to be the first wave of a 5 wave sequence that then completed at the close as 1975.79-1966.80-1972.65-1966.56. With a sequence completing today at the low, the SPX should experience a bounce tomorrow. Resistance is at 1969 and then 1977.

Wednesday's Market 09/24/2014

After completing a 5 wave sequence from 2019.26 yesterday at 1982.86, the SPX looked poised for a move to the upside. The index did start off to the upside, moving to 1986.23 at the open. However, the SPX was not quite ready to break out. After opening higher, the index fell to 1980.68. The SPX then stair stepped lower, finally reaching 1978.63. From yesterday’s 1982.86 low the SPX formed an inverted corrective wave at 1986.23-1980.68-1983.80-1980.10-1983.10. Following that the index moved to 1979.06-1981.26-1978.63, completing a higher degree sequence from 2019.26 just above the 1976 target first mentioned on Sunday.

After reaching 1978.63 the SPX did rally sharply. The index ran up quickly to 1985.23, paused momentarily, and then continued higher to 1993.08, where another pullback took the index to 1989.90. The rally continued after that, reaching a high of 1999.79 just before the close, and completing a 5 wave sequence at that point.

With the completion of a 5 wave sequence at 1999.79, the SPX may experience a pullback from here. Support is at 1988, and then 1982. The next resistance level would be 2032. The SPX appears to be at another decision point; either move to new highs, or continue the decline.

Tuesday's Market 09/23/2014

The SPX gapped down this morning to 1986.70. After bouncing to 1995.41 the index continued the decline, falling to 1983.80 before bouncing again. His time the SPX rose to 1988.59 before falling to the low of the day at 1982.86.

The SPX may have found at least a short term bottom at today’s low. From the 2019.26 high the index completed Wave A at 2006.59. Wave B then completed at 2014.08 and Wave C at 2001.75. Wave D was an inverted corrective wave, completing at 1995.99. Today’s action can be seen as Wave E which completed at 1982.86.

I am still looking at 2019.26 as the top from the 1074.77 low. If the SPX is to make a new high, it may do so from here. Resistance is at 1988, 1992, and then 2013. A move below today’s low would signal continued downside action.