Since falling to 1820.66 a month ago, the SPX has
made a strong move to the upside. The rally was swift at the beginning, with
the index gaining 100+ points in 13 trading days. Since that point the index
has only managed a gain of just over 20 points over the next ten sessions.
Looking at the wave structure from the 1820.66
low, the SPX completed a wave 1 at 1869.00. Wave 2 was then an inverted
corrective wave, completing as 1835.02-1949.31-1926.83-2024.46-2001.01.
Inverted corrective second waves usually produce a strong move in the direction
of the higher degree trend, just as it did here. Waves 3, 4, and 5 are then
less explosive, as seems to be the case here thus far. From the 2001.01 low, the
index has formed 4 waves, at 2025.32-2015.86-2041.28-2030.44, which generates a
target for wave 5 between 2053 and 2063. Once this completes the SPX should
pullback, and then move higher once more to complete the sequence from 1820.66.
2070 still seems to be a good target.
There is a possible, but less probable count that
has the recent 2046.18 high as the completion of the wave from 1820.66. If the
SPX moves below 2030.44 this scenario would become most probable, with a move
below 2001.01 likely confirming the top was at 2046.18.
