Market Update 03/08/2023

 As we went into Tuesday's trading session, we were awaiting some resolution to the two counts I discussed over the weekend. A move above 411 would likely mean a 5 wave sequence had completed Thursday at 392.33. A move below 392 would mean a continuation of the move lower from 418.31. 

Tuesday saw a sideways opening, before moving decidedly lower following statements from Chairman Powell. SPY tested the 400 level after those remarks, falling to 400.51 before trying to rally. After moving slightly over the 403 level, SPY once again moved lower, this time breaking through the 400 level momentarily before trying to rally again. This time the rally fizzled at 402, and SPY fell to 397.63 before trying to rally into the close.

This morning saw SPY trying to find some stability, trading mainly between 398-400 until after noon. The 400 level is providing some resistance, and having failed to regain that level, SPY dropped lower to 396.62. A late afternoon rally found SPY once again moving towards the 400 level, but failed once again, closing out the session at 398.92.

Nothing that has happened over the past couple of days has changed our count. I continue to look at the 411 level on the upside, and the 392.33 low for an indication of which direction the market has chosen.

Shorter term, SPY may have put in at least a temporary low at today's 396.62 level. A short term count has SPY completing Wave 1 of a sequence from 407.45 at 406.23. The rebound to 407.38 off that low formed Wave A of an inverted corrective wave. Wave B of that sequence provided the most damage, carving out a lengthy 5 wave sequence that ended this morning at 396.83. The choppiness this morning completed Waves C, D, and E, to complete Wave 2 from 407.45. The late day swoon to the low of the day finished out the sequence at 396.62.

The rally off that low came in three waves, which may be the start of a move higher, or simply a respite from the past two and a half days of selling. 

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Monday Market Update 03/06/2023

 The market opened stronger today, continuing the late week rally that sprung from last Thursday's opening low. SPY gapped up, opening at 405.08, and remained strong through the early morning. The stock reached 407.45 shortly before 11:30. That proved to be the high of the day, with SPY drifting lower through the afternoon. With half an hour of trading left, SPY closed that opening gap. After hitting a low of 404.03, it once again pushed towards 405.00 into the close.

SPY remained below the critical 411 level I had mentioned over the weekend, so the two counts I reviewed thoroughly in the Weekend Update remain in play. The market is now at an inflection point, and how it reacts at this level will be pivotal.

Technically, SPY came off the overbought levels of the morning to finish the day in oversold territory on the 15 Minute chart. There is also a small positive divergence near the end of the day. 

Since I have been also following TSLA recently, I have decided to include that analysis here also.

Following the sell-off last Thursday that brought TSLA to 186.01, the stock rallied back to 200.48 on Friday. It was unable to hold the 200 level, and saw a bit of a sell-off into today. I continue to count the completion of a 5 wave sequence from 101.81 at 209.41. The following move to 186.01 could possibly be a correction low. 

Today's drop took TSLA into oversold territory on both the 15 Minute and Hourly charts, with a positive divergence on the 15 minute chart, which would be a good place to rally off of. The important levels to watch are the 186.01 low, and the 209.41 high.

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Stocks to Watch:

Here are a couple of stocks I will be watching on Tuesday.

AMGN:

AMGN gave a short term buy signal today. These signals usually last 1-3 days.

BIDU:

BIDU seems set up for a short term buy signal. While the signal has not been given yet, a higher open would likely trigger one.

PDD:

PDD is in the same position as BIDU. No signal yet, but a move higher from here would likely trigger one.

Weekend Market Update 03/05/2023

 For some time I have targeted the 396 level, to be followed by a move the 406-411. SPY spent most of the past two weeks bouncing around the 402-392 level. On Friday we did see SPY finally break above that 402 level. When last I posted, my current count from the 418.31 high was this:

SPY had moved slightly below the level at which I was expecting to see a move higher. The action from the 21st to the 24th was choppy, and difficult to follow at times. Now that it has resolved itself I can revisit this count, and see where we are. After reviewing the count further, I was able to clarify some of the action, and show a slightly revised count here:

The major revision involved seeing Wave E(Purple) as a more extended wave that ended on the 23rd at 402.20. Waves 3,4 and 5(Purple) then completed on the next move lower to 396.25, completing Wave D(Green). From there we can walk through the rest of the count. Wave 1 (Green) completed at 408.51. Wave 2(Green) then completed as an inverted corrective wave, which broke down into A-B-C-D-E, giving us 408.51 - 413.65 - 409.47 - 414.00 - 396.25 - 401.62. Analyzing the sequence (418.51, 413.65), (409.47, 414.00), (396.25, 401.62) gives an R^2 value of .99837.

We can now see that the Green 5 wave sequence completes as 415.05 - 408.51 - 401.62 - 393.64 - 401.29 - 392.33. (415.05, 408.51), (401.62, 393.64), (401.29, 392.33), gives an R^2 value of .99731.

The completion of that sequence is Wave D(Red). Given the four competed waves of this sequence, A-B-C-D(Red), we can now calculate the range in which Wave E(Red should complete. SPY has already entered into that range, with the maximum of that range being 411.19. That level may be an important one, as I will explain.

The above count calls for a high between the the current price levels and 411.19, to be followed by three waves down to complete the 5 wave sequence from the 418.31 high. There is an intriguing alternate count which I will discuss now.

In the current count Wave B(Red) completed on the 10th at 405.01. From that point there are 5 counted waves to the 414.00 high on the 15th. I am currently counting these as Wave C(Red), Wave 1(Green), and Waves A-B-C(Green). This still seems to be the best count, but there is an important alternate count to consider. I currently show the first wave from Wave B(Red) completing at 415.05. A case could be made for that wave having completed slightly earlier, at 412.97, followed by a complex corrective wave to 408.51. Taking that as the high gives the sequence from 405.01 as 405.01 - 412.97 - 408.51 - 413.70 - 409.47 - 414.00. (405.01, 412.97), (408.51, 413.70), (409.47, 414.00), with an R^2 value of .99343. That would put the Wave C(Red) endpoint at 414.00. 

This shows the alternate count using 414.00 as Wave C(Red). I filled in the remainder of the alternate count with "?". Continuing with that count we see that Wave 2(Red) completes as 407.57 - 416.49 - 405.01 - 414.00 - 396.25 - 401.62. (407.57, 416.49), (405.01, 414.00), (396.25, 401.62) gives us an R^2 value of .99636. The entire 5 wave sequence from 418.31 can then be seen as 418.31 - 407.57 - 401.62 - 393.64 - 401.29 - 392.33. (418.31, 407.57), (401.62, 393.64), (401.29, 392.33) gives an R^2 value of .99632.

It seems that SPY is at an inflection point here, which makes the current price levels extremely important. A move above the 411.19 upper limit I discussed earlier would likely make the alternate count I have discussed the correct count. 

There is some further evidence of a bottom having been put in at 392.33. In my TSLA update yesterday I discussed one method for determining a likely limit for a corrective wave using the previous low, the correction low, and the last two high of the previous wave. The 392.33 low would satisfy that method. SPY has also given a technical buy signal on the daily chart. We will see if those hold over the coming days.

TSLA Weekend Update

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