Wednesday 03/25/2020

The SPX opened higher today, moving above yesterday's high to 2501.57. After a slight pullback, the index powered higher, hitting the high of the day at 2571.42. From there the SPX moved slightly lower into the close.

From the 2191.86 low, the SPX looks to have completed a 5 wave sequence at 2571.42. This traced out as 2191.86 - 2300.73 - 2360.25 - 2501.57 - 2407.53 - 2571.42. Wave 2 of this sequence was the inverted corrective wave. With a 5 wave sequence likely completing, a pullback would be in order. So it looks like decision time will be setting up shortly. New lows, a continued rally? Looks like we will find out shortly.

We might see a pullback at this point. Support may come in between 2368 and 2401,

Tuesday 03/24/2020

Going into today's trading, I had viewed yesterday's 2191.86 low as wave d of a 5 wave sequence, looking for wave e to then terminate between 2389 and 2409. The SPX opened significantly higher, reaching 2387.98 within the first hour, which was just below that range. The index continued higher, moving into that range, but then moving above it to 2436.88. After a small pullback, the SPX moved higher into the close, topping out at 2449.71.

As I indicated yesterday, a move above 2409 wold invalidate the short term count I was following, and point to something else going on. So I have had to re-evaluate the wave count. Several days ago I had mentioned an alternate count in which the SPX was in the final wave of a sequence from 3393.52. That count is still in play, however there is not a clear 5 wave sequence from Wave E (2553.93) to the 2191.86 low.

The other possibility at the moment is to look at the move from Wave C (2710.89) to the 2191.86 low as a 5 wave sequence, making 2191.86 Wave D, and not 2367.04. There is a possible 5 wave count for that move. Wave E is then possibly on the way, with the SPX moving into a range that would complete that sequence today. Technically this also fits, with Waves A and C of the sequence touching overbought. Looking at 2553.93, or what I originally have labeled as Wave E, you will notice the RSI does not hit overbought. Today's move did bring the index up to that level. The upper bound for this count is 2503. This would be the highest point the SPX could reach and still satisfy my model.

So it looks like a move above 2503 makes 2191.86 the completion of a 5 wave sequence form 3393.52, and at least a short term bottom. Until that level is exceeded, another move lower is still possible.

Monday 03/23/2020

The SPX opened lower this morning, dropping to 2229.47 in the first 15 minutes before rallying to 2294.55. The rally was short lived, and the index soon rolled over, falling to the low of the day at 2191.86. From there the SPX ran up to 2300.73, fell back to 2198.98, and then moved slightly higher into the close.

The SPX has moved lower since last Thursday's wave c high of 2466.67. My last few posts have outlined my expectations from that point. First a move lower below 2280.52, followed by a move higher to complete the fifth wave from 2280.52. With today's move to 2191.86, the SPX looks to have completed a 5 wave sequence from 2466.67, the wave c high. I have labeled this on the 15 minute chart as 2466.97 - 2404.99 - 2453.01 - 2353.85 - 2404.30 - 2191.86. Now knowing the probably fourth point, a target range for wave e can be projected. To this point the move has been 2280.52 - 2431.03 - 2385.83 - 2466.97 - 2191.86. This would project a target of 2389 - 2409 for wave e.

So I am looking for a move higher to 2389-2409. A move above 2409 would likely invalidate this short term count. A move below 2191.86 before reaching my target level would mean wave d has not completed.