Tuesday Update 03/21/2023

 In Monday's Update I said I was looking for SPY to move up to the 397-399 level, and then pull back by approximately 5 points. After closing at 393.67 on Monday, SPY gapped up this morning right into that 397-399 range, opening at 397.30. It reached a high of 398.34 just after 10:00am, before pulling back to 395.58 shortly before noon. Shortly after 1:30pm SPY was back up to 397.42. By 2:00 it had pulled back to 396.24, but then rallied strongly into the close, coming close to the 400 level at 399.41 before closing the day at 398.88.

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We have been following the wave sequence from March 13th low of 380.65.

The initial move today to 398.34 met the requirements to complete Wave 5(Tan), and Wave D(Green). The following pullback to 395.58, while slightly less than the ~5 points I had mentioned, then met the requirements for Wave E(Green), and Wave 4(Green). Wave 5(Green), and the completion of the 5 wave sequence from the March 13th low, then projects to complete between today's late afternoon high, and 418. This would imply that the market is reaching a short term high.

While today's action met the requirements for the completion of the above waves, the short term wave structure counts better as a single wave from yesterday's Wave 4 low. This could mean that Wave 4 did not terminate yesterday afternoon, but is itself forming an inverted corrective wave that has yet to complete. This would point to higher prices still to come.

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Monday Update 03/20/2023

 In Friday's Update I outlined the start of what appeared to be a bullish sequence beginning from Friday afternoon's low. This sequence played out this morning as SPY opened with a gap to the upside, opening at 391.21, and then continuing higher to 391.85. SPY then entered a consolidation pattern, trading between that high and 390.07, which closed the opening gap. SPY then moved  to a new intra-day high at 392.69, before pulling back to 391.16. From that point, SPY showed continued strength nearing mid-day, and hit a high of 394.17. Once again SPY pulled back, falling all the way back to 390.73 before regaining strength heading into the close. SPY made it back above 394 before pulling back slightly to close the day at 393.67.

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Weekend Update 03/18/2023

 The week started on a bearish note, with SPY gapping down Monday morning to 380.65. This set up a bullish divergence on the RSI(5) for both the 15 and 60 minute charts. The gap down was followed immediately by a reversal and a fill of that opening gap. The rally off that low continued into Tuesday, where a reversal to the downside carried into Wednesday, and brought SPY back down to 383.71. By mid-day Wednesday SPY was on the upswing again, lifting it to 396.47 just before Thursday's close. SPY finished the week with a gap down, and this time the bearish sentiment carried into the close. SPY closed the week at 390.12.

The current count from Monday's low has SPY in Wave D(Purple). This wave is itself sub-dividing, with an inverted corrective Wave 2 possibly having ended Friday. This would put SPY in Wave 3 of D. My working target for the completion of the wave Monday's Wave D low is above 404.

On the 60 Minute chart, we can follow the sequence from the 418.31 high. Wave 1 terminated at 407.57, and was followed by an inverted corrective Wave 2. This completed as (407.57, 416.49), (405.01, 415.05), (392.33, 407.45) with an R^2 value of .99992. Wave 3 then completed at 396.59. From that point, things became slightly more complicated. I have been counting the bounce off the Wave 3 low as having occurred in three waves, which would have a very bearish connotation as I discussed last weekend. Until SPY breaks above that high, which was 401.48, that bearish scenario is still in play. But if the current shorter term count plays out, that high will be exceeded, so there is an alternate count to consider.

 

There is a count that has an inverted corrective wave completing between the Wave 3 low and 393.16, which would be Wave 4. The 380.65 low would then complete the sequence from 418.31 as (418.31, 407.57), (407.45, 396.59), (393.16, 380.65), with an R^2 value of .99925.

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