Thursday Update 03/23/2023

 In Wednesday's Update, I stated SPY had completed a 5 wave sequence from Wednesday's high, into the Wednesday afternoon low. I also gave supporting evidence for the 392.07 low as a likely stopping point, if only for the moment. I then said to expect a rally above 399.

SPY did open to the upside, and continued higher until just after 11:00am. This move completed in a 5 wave sequence, (392.07, 397.21), (396.29, 398.51), 398.11, 399.29), with an R^2 value of .993265. This sequence completed just over the 399 level I targeted, which would complete a Wave E of the alternate scenario I discussed yesterday, with yesterday's low being Wave D. 

After reaching that high, SPY turned lower, completing a 5 wave sequence to the downside just before 3:00pm, just above 390. This sequence went (399.29, 397.13), (398.02, 394.75), (396.20, 390.54), with an R^2 value of .996803.

SPY rallied off that low, making back to 394.77. Another move lower to SPY to the low of the day at 390.35, before rallying again to 394.99 shortly before the close.

We seem to be at a critical juncture. A few scenarios point to another run up to near 400 from this point. If that plays out, we may indeed be in this narrow trading range a bit longer. A significant break below the 390 level probably points to a re-test of the lows.

Your support is appreciated.

Wednesday Update 03/22/2023

 In Tuesday's Update I wrote this:

"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."

SPY opened flat today, trading in a narrow range between 397-400 while it awaited the Fed announcement. When that came, volatility increased, and the initial reaction seemed to be positive. SPY ran up to 401.70 immediately following the announcement, but quickly dropped back to 397.40. SPY rallied again, this time to 402.49. That was to be the high of the day, as SPY soon fell to a new daily low at 395.67. A rally from that point soon evaporated, as SPY rose to 399.89 before starting a precipitous decline into the close, finishing the day at 392.07.

As it appears SPY has put in a short term top at today's high of 402.49, I can complete the count from the March 13th low of 380.65.

 Your support is appreciated.

SPY completed three waves up from that low, at 387.31, 383.65, and 390.39. These are labeled Waves A, B, and C in green. Wave 4 then broke down as an inverted corrective wave, with Waves A, B, and C completing by the 15th. Wave D can then be seen subdividing as Waves 1-5 in tan. This completed as (383.71, 386.57), (388.55, 394.17), (390.73, 398.34), with an R^2 value of .99763. The subsequent drop to 395.58 was Wave E, with Wave 4 completing as (390.39, 385.36), (389.50, 383.71), (398.34, 395.58), with an R^2 value of .99682. The rise into today's high of 402.49 then completed the fifth wave of the entire 5 wave sequence from 380.65 as (380.65, 387.31), (383.65, 390.39), (395.58, 402.49), with an R^2 value of .99999. I have similarly documented most of the smaller waves throughout this sequence in my Daily Updates for those interested.

If this move down is merely a correction of the just completed sequence, we can make some projections. The first projection for a corrective wave suggests a move to between 390.7 - 392.5 with today's low of  392.07 within that range. This projection is based on the start point of the previous sequence, 380.65, the completion point of the sequence, 402.49, the previous high before the completion point of the sequence, in this case Wave D(green), or 398.34, and the correction low. It can be found by solving for (380.65, X), (X, 398.34), (398.34, 402.49), where "X" is the correction low.

Looking at the decline from today's high, we can see three waves down with the third wave subdividing. That subdivision so far is (399.89, 398.00), (399.27, 396.32), (397.43, 392.07). That has an R^2 value of .99887, so if today's low holds, we could see a move higher.

There is one final interesting thing about the decline from today's high. I have been looking at the March 13th low as the completion of a 5 wave sequence from the February 2nd high of 418.31. I did have a more complex count originally, especially concerning the last set of waves going into Wave 5 of that sequence. I originally had the move up into Wave 4(Purple) as three waves. The move into Wave 5 made this a particularly bearish scenario. I had relegated it to alternate status given the recent run-up, but today's action brought it back into play for the moment. The important part at the moment is the move into Wave 5, or alternately, Wave A?. The recent run-up would then be Wave B?. The three wave decline into today's close can then be seen as (393.16, 380.65), (402.49, 395.67), (399.89, 392.07), with an R^2 value of .99826. This count would suggest a move above 399 from today's low. Although originally a bearish scenario, this may now point to continuation of trading within the recent range.

For now, a move below 390.7 would be short term bearish. We may see a bounce from today's low. If we do, a move above 399 seems to point to more volatile swings up and down as we reconcile some of the previous wave structure. Depending on the structure, it may also mean a fresh move to the upside is underway. A bounce below 399, followed by a move below this recent low would also point to a more bearish scenario,

Help support further research.

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.

Your contribution makes this analysis possible.

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.

Your support is appreciated.