Friday Update 03/17/2023

It was another gap down opening for SPY. It opened at 393.12, and spent the first hour and a half bouncing between 392.24 and 394.40. That was followed by the most damaging move of the day, taking SPY down to 388.56. The remainder of the day was spent in a narrower range between that low and 391.78, although a very slightly lower low was made late in the day at 388.55. 

From yesterday's late afternoon high, we can count the initial move lower to 392.24 as a Wave 1. Wave A of an inverted corrective move occurred soon thereafter at 394.40. Wave B, as is often the case, was the most damaging move of the day. It subdivided into a 5 wave sequence of it's own, which we can count as (394.40, 392.38), (390.98, 389.01), (390.25. 388.56), with an R^2 value of .9967. Waves C, D, and E carried us to the afternoon high of 391.78. This completed Wave 2 as (392.24, 394.40), (388.56, 390.18), (389.76, 391.78) with an R^2 value of .99646. Waves 3, 4, and 5 then carried SPY to the late afternoon low of 388.55. This completed the 5 wave sequence from yesterday's late afternoon high as (396.47, 392.24), (391.78, 389.9), (389.63, 388.55) with an R^2 value of .9967.

Once that low was put in, SPY seems to have managed some constructive work in the last hour. it appears to be the beginning of a sequence that has started with a Wave 1 at 390.05 followed by an inverted corrective wave (390.05, 389.20), (390.87, 389.60), (390.52, 389.44), which has an R^2 value of .99906. If this count proves correct, it implies a move higher.

Widening out to look at the last two days, we can now continue the count from Wednesday's low. From that low, SPY completed two waves higher Wednesday afternoon, and began a fourth wave that terminated Thursday morning. After hitting that low, SPY began yesterday's very strong move to the upside. The move occurred in a 5 wave sequence as (386.29, 394.45), (392.40, 396.14), (393.62, 396.47), with an R^2 value of .99999. Count the first wave off Wednesday low as Wave 1, followed by Waves A, B, and C, yesterday's move becomes Wave D. The sequence from Wave 1 to today's low becomes, (386.57, 385.44), (389.49, 386.29), (396.47, 388.55) which has an R^2 value of .99945.

This count implies that SPY is still in the sequence that started on Wednesday, and is in Wave C of that sequence. Following the completion of this sequence, I would still expect the approximately 5 pint decline I talked about yesterday. So we may be in a trading range waiting on the Fed decision. Time will tell.

I will update some of the other wave structures over the weekend.

Your support is appreciated.

Thursday Update 03/16/2023

 SPY gapped down at the open, moving lower to 386.29. From there we saw some sideways action, with SPY moving between yesterday's close, and the opening low. Just before 10:30am, SPY began to move higher, reaching 394.45 before noon. After a slight pullback, SPY moved to 396.14. From there we saw mostly sideways action with SPY hitting a new high for the day at 396.47 shortly before the close, and closed at 396.04.

We have now seen a considerable rally off the Wave C low I identified yesterday. As I stated yesterday, once this wave completes, we should see a pullback near the magnitude of Wave A, which was ~5 points. This should then be followed by another wave higher to complete Wave 5 from the March 13th low.

Your support is appreciated.

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.