Monday's Market 09/29/2014

It was another interesting day, where obviously Friday’s rally did not continue as I had anticipated. Instead the SPX fell sharply at the open, dropping to 1964.04. From there the index rallied in somewhat choppy trading, cutting the bulk of its losses.

Although this wave did not play out completely as anticipated, I am still inclined to believe that this is a convoluted wave Thursday’s 1965.99 low that has yet to complete. My target for this wave is 1997. A move below 1976.76 would invalidate this count. I am also still looking at 2019.26 as the completion of the wave from the 1074.77 low. 

Friday's Market 09/26/2014

It was a fitting end to a rollercoaster week that saw the SPX sell-off Monday, Tuesday and into Wednesday, rally sharply into Wednesday’s close, and then plunge on Thursday. Having completed a 5 wave sequence from Wednesday’s 1999.79 high at the close on Thursday, it was likely that the index would bounce at the open. It did just that, moving higher at the start of trading to 1972.16. The morning was choppy, as the SPX then fell to 1969.16, rose to 1975.69, and then moved lower again in three waves to 1969.80-1974.15-1967.92. The first three moves can be seen as Waves 1, 2, and 3 of a 5 wave sequence higher, and the last three as Waves A, B, and C of an inverted corrective Wave 4. Wave D turned out to be the bulk of today’s rally, as it drove the index higher to 1986.37. That was followed by one more pullback to 1981.07 that   completed Wave E, and thus Wave 4. If correct this would mean a continuation of the rally on Monday, with a minimum Wave 5 target of 1990.

Where this Wave 5 concludes could provide some important clues as to the next larger move. The key price to watch is Wednesday’s 1999.79 high. If this wave terminates below that level, it is likely part of a complex corrective wave from Wednesday’s 1978.63 low. This could take several forms, and possibly conclude between 1999.79 and 2019.26. If current wave concludes above 1999.79, this may be the start of a larger move to new highs. I will try to elaborate on these scenarios over the weekend.

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.