Wednesday's Market 11/05/2014

On Tuesday the moved lower at the open, falling to 2001.01 before rallying back to 2013.11 near the close. With the index completing 5 waves from the 2001.01 low to 2013.11, and below the previous 2024.46 high, I was expecting the SPX to decline today. This expectation was also partly due to my erroneous interpretation that the move from 2024.46 to 2001.01 was not a complete 5 wave sequence.

After further reviewing my charts, the move from 2024.46 was a complete 5 wave sequence.  The SPX then completed a sequence at 2013.11 as I discussed yesterday. This morning the index gapped higher, reaching a high of 2023.56 a few minutes after the open. The SPX then declined in three waves down, 2016.20-2020.61-2014.42. From yesterday’s 2013.11 to 2014.12 5 waves can be seen as 2013.11-2009.86-2023.56-2016.20-2020.61-2014.42. This completed an inverted corrective wave from the 2001.01 low. The SPX then rallied again to 2022.92, pulled back to 2016.36, and then rallied to 2023.77. Putting this all together from the 2001.01 low gives 2001.01-2013.11-2014.42-2022.92-2016.36-2023.77, which completed a 5 wave sequence.

Despite the initial intensity of this morning’s move, the SPX failed to take out the previous 2024.46 high. Three times it came within two points of that mark; with two of those getting within one point, and three times the index was turned back.

Given the completion of a 5 wave sequence today at 2023.77, the expectation would now be for the SPX to decline. Near term support is at 2019 and then 2011. Longer term support is at 1999, and then 1943. The SPX again appears to be at a decision point. My upside target remains 2070, and a move above 2024.46 would likely signal a continuation of the move from 1820.66 to that level.

Tuesday's Market 11/04/2014

The SPX started off lower this morning, continuing the decline from 2024.46. After initially falling to 2011.28, the index tried to rally, but only made it to 2015.98 before turning lower once again. This leg took the SPX down to 2001.01, which proved to be the low of the day, and then rallied into the close.

My count from the 2024.46 high has a first wave down at 2022.31. The SPX then formed an inverted corrective second wave that completed with today’s first rally to 2015.98. The third wave was the subsequent decline to 2001.01 and the fourth the rally back to 2013.11. The index actually hit a high of 2013.87, but I see the end of the wave as 2013.11.

Given this count the target for the fifth wave is 1993-1998. Therefore I would look for the SPX to decline to that level, and then move higher. First resistant would be near 2010 given this scenario. A move above 2015.98 from current levels would mean that my count is wrong.

Monday's Market 11/03/2014

Over the weekend I mentioned that I was looking for three waves higher from Friday afternoon’s 2010.77 low to complete a 5 wave sequence from the 1820.66 low. The SPX opened slightly higher, and then chopped its way up to 2021.49. From there the index pulled back to 2014.17 before moving to a new high at 2024.46. Once reaching that level, the SPX then moved lower for the rest of the day, before bouncing slightly higher into the close.

I was looking for something like 2028-2019-2035 to complete this sequence, but the SPX did not quite reach those targets, completing the last three waves as 2021.49-2014.17-2024.46. This does look to complete the sequence from 1820.66.

I would be looking at a preliminary target of 1943 for this decline. A move above 2024.46 would mean that the near term top is not in yet.