Tuesday's Market 02/21/2023

 The market got off to a rocky start with a gap down opening. SPY hit 403.15 shortly before the open, and made a feeble attempt at a recovery during the opening 15 minutes. This recovery could only lift SPY slightly more than a point before it resumed to the downside. This slide lasted into the afternoon with hardly an attempt at a rally. SPY fell below the 400.00 level dropping to 398.82 before another attempt to the upside was mounted. The 400.00 level then turned into resistance, as SPY topped at 400.16 before falling once again into the close. It closed at 399.14, only slightly above the worst levels of the day.

Looking at the daily chart, one can count a completed 5 wave sequence from the 10/13/2023 low of 348.11 to the 2/2/2023 high of 418.31. This sequence can be counted as 348.11-390.39-368.79-410.49-374.77-418.31. This sequence has an R^2 value of .9965, which satisfies my model. 

The first thing I notice about this sequence is that it lacks an extended corrective wave, which one would normally see during an impulse wave. Thus it give the appearance of an A-B-C correction from the 348.11 low. If one draws a tend line connecting the 348.11 low and the 374.77 low, one will notice that the market came very close to that line today, indicating that we may be at an important juncture. 

Technically, the Daily SPY chart shows an oversold condition on the RSI, but the MACD shows a bearish crossover. 

The shorter term charts have been less clear. One possible count shows a short term 5 wave sequence could complete between 396-386, but the technical action may provide better clarity to shorter term direction. 

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One More Move Higher for TSLA?

 TSLA has been on a relentless tear since putting in a low at 101.81. After an initial move higher to 123.52, TSLA moved sideways, bottoming at 115.60. From that point it was almost a straight line up to 214.00, with only short pauses along the way. Once hitting 214.00, TSLA had a slightly deeper correction to 187.61. That did not last long, however, as the stock quickly recovered and out in a new high at 217.65.

My analysis shows Wave 3 of a 5 wave sequence completing at that 217.65 high. The subsequent pullback to 197.50 was likely Wave 4, with Wave 5 currently underway. If this count is correct Wave 5 should carry TSLA to a new move high. The maximum price for the sequence as described would be 240.00.

TSLA appears to be in Wave 5 of the current 5 wave sequence, and should complete this sequence between 217.65, and 240.00. A move below the previous 197.50 low would likely mean that the sequence has completed. After this move, I would look for a more substantial pullback.

 

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Wednesday 04/15/2020

As of Friday's close, I made my case for the possibility of the SPX having completed a 5 wave sequence from the 2191.86 low. Given my count from that low, there is an upper limit of 2888 for this wave to complete.

On Monday, instead of continuing down from Friday's 2818.57 high, the index gapped up at the open, and then continued to move higher through the day, finally topping out at 2851.85. Friday's high of 2818.75 still looks to have completed a 5 wave sequence from the 2447.49 Wave 4 low. But it does look like that only completed a first wave from that low. Looking at the SPX from the 2818.57 high, the index first dropped to 2721.17 on Friday. The initial move higher on Monday took the index to 2843.83 with a subsequent move lower to 2807.89. Finally the SPX made another push higher to 2851.85. From the Wave 4 2447.49 low, the SPX thus has formed 5 waves, (2447.49, 2818.57), (2721.17, 2843.83), (2807.89, 2851.85), which has an R^2 value of 1. At times waves will form such a structure, or a structure that creates a trap.

So taking the waves from the 2191.86 low to the 2851.85 high, gives, (2191.86, 2300.73), (2360.25, 2641.39), (2447.49, 2851.85). This is still under the 2888 upper limit, and has an R^2 value of .9979.

This morning saw the SPX gap down, moving into oversold territory on the RSI(5), and then staged something of a recovery to hit overbought, without making a new high on the SPX. This suggests another move down. The level I am watching to the upside remains 2888.