Wednesday Update 03/15/2023

 It was another volatile day for the markets. SPY gapped down at the open, moving back to 385.70. It then bounced back to near 388 before falling once again. First to 385, and then 384.31 after another bounce. That once again found support, and SPY rallied back to 387 before falling to the low of the day at 383.71.

As has become the norm, SPY rallied in the afternoon, rising to 389.49 before falling back to the 387 level. But a rally in the last few minutes brought SPY back to near the high of the day, closing out the session at 389.36.

Before discussing today's market, I will first say I miscounted the last move up from yesterday. It was a 5 wave sequence that went (387.05, 388.46), (388.90, 390.64), (389.88, 392.18), with an R^2 value of .99414. Having done that, I will continue with today. If yesterday's last sequence was a Wave A, we can see the initial gap down, and subsequent choppiness can be counted as a 5 wave sequence, finishing Waves B, C, D, and E. (387.05, 392.18), (385.70, 387.16), (385.72, 387.72), with an R^2 value of .99209. Following that, we can count a 5 wave sequence into the day's low as, (387.72, 386.02), (387.44, 384.31), (387.37, 383.71), with an R^2 value of .99606.

Next I will widen out the view. This shows the wave I have been following from the Monday low. As we can see Waves 1, 2, 3, A, and B, remain the same. I had counted the low on the 14th as Wave C, but with today's action, the entire move from the Wave B high, to today's low can be counted as a semi-inverted corrective wave. This went (389.50, 385.05), (393.45, 387.05), (387.72. 383.71). This sequence has an R^2 value of .9897, slightly below the threshold of .99. However, it misses the threshold by .01. Using 383.72 as the end point yields .99011. Given the closeness, I will consider it within the margin of error, or slight misreading of the smaller waves. But this seems the best count.

This leaves us in Wave D, which is moving higher. Once this wave completes, we should get a move lower, with a magnitude similar to the Wave A decline. That would conclude Wave 4, with another move higher for Wave 5.

With the current volatility, and uncertainty surrounding the market, things can change quickly. 

Tuesday's Update 03/14/2023

 SPY gapped up this morning to 390.44 off yesterday's low of 385.05. The rise continued into midday, with SPY reaching a high of 393.45. After attaining that high, SPY gave back some of the gains through the afternoon, hitting a low of 387.05 after 3:00pm. From there SPY rallied again, finishing the day at 391.68.

If we look back at yesterday, a short term count becomes apparent.

From yesterday's early morning low, we see SPY rose in three waves to 390.39 Following that, we see a three wave decline to 385.05. Those waves can then be counted as Waves 1, 2, and 3, followed by three waves, A, B, and C of an apparent inverted corrective wave. This implies a move higher, followed by a decline. 

This morning we saw SPY rise in a 5 wave sequence, (385.05, 391.92), (390.37, 392.99), (391.90, 393.45), with an R^2 value of .99313. This move took us to 393.45, just slightly above the 393.16 high I talked about yesterday. This indicates the bearish count could be reversing itself. There are still a number of ways this could go, but for the moment it looks like the SPY has avoided the immediate move lower.

After that high, SPY moved lower, forming a Wave 1 at 392.01. From there we saw an inverted corrective wave, (392.01, 392.74), (391.57, 392.51), (388.35, 390.53), with an R^2 value of .9995. That completed Wave 2, and the entire sequence from 393.45 as (393.45, 392.01), (390.53, 387.71), (390.00. 387.05), with an R^2 value .99959. The rise from there can be seen as a Wave 1, followed by an inverted corrective Wave 2. 

Looking at the two days together, we can see that today's completed Wave D of the inverted corrective wave, and today's low Wave E, and thus Wave 4 from yesterday's low. With four waves completed, we can now project Wave 5 to complete at 393-395. 

Thank you for your support.

Monday Update 03/13/2023

 SPY gapped lower to start the week, opening at 381.93 and then falling further to 380.65. SPY then rallied off that low, moving into positive territory, and reaching 387.31. That was right at the 387-390 resistance level I mentioned over the weekend. SPY gave back some of those gains, dropping back to 383.65 before once again moving higher, this time to the upper edge of that resistance zone, topping out at 390.39. The rest of the session was spent in consolidation mode, as SPY fell back near 385 before trying to test the 390.39 high. It fell just short at 389.50 before falling back near 385 and closing at 385.31.

This is the chart I posted in the Weekend Update:

With this morning's opening decline I made some adjustments to the count for the last two hours of trading.

 

 

The count from the high just past 2:00pm turned out to be much more complicated than I originally thought. I will not detail the entire count, but it makes this morning's low the end of a 5 wave sequence that began with the 2:00pm high.

I noted over the weekend that I sometimes place an "X" at the termination points of waves until the count becomes clear. That count did become clear with this morning's low, and I have noted those counts. The first three waves from the Wave D low to the left of the chart became Waves A, B, and C. From Wave C, a 5 wave sequence ensued, terminating with this morning's low, completing Wave D.

In my discussion in Thursday's Update, I described an interesting set-up in the wave structure. We started with Waves A, B, and C, with Wave A being shorter than Wave C, and Wave D then completing below the Wave A origin. This is a bearish formation since Wave E would need to complete below Wave D. This can be negated by a move above the Wave C high. I mention this because the chart above now displays an identical pattern. This structure indicates a termination point for Wave E below 381. This matches almost exactly the targets I have been given for the previous wave of this type. 

If this wave structure holds, it implies a move below 366 before a rebound to below 378, based on some other projections I have worked up.

As I mentioned earlier, this structure can be negated with a move above the Wave C high, which gives some reasonable levels to watch. The Wave C high for the current wave structure is 393.16, and the Wave C high for the first wave I described on Thursday is 401.48. A move above either of those levels would mean some re-evaluation of the waves is needed.

Your support is appreciated.