Monday Update 03/27/2023

 Since I have been following the wave from last Thursday's 390.54 low, I will begin from there. Over the weekend I had set a target for the completion of this wave between 395.7 and 398.2. The wave ultimately completed in a different fashion, and so my target was slightly off. 

 

Here we can see that from that low, SPY completed Wave A at 394.77. Wave B completed at 389.40, and Wave C at 392.52. Wave D was a complex wave that finally terminated at 393.04. We can the see Waves 1, 2, and 3 completing into Friday's close. The slight pullback from Wave 3 into the close became Wave A of a inverted corrective Wave 4. Thus SPY opened to the upside, reaching 398.68 before a slight pullback as 397.88-398.17-397.41. This, combined with the slight pullback into Friday's close, completed Wave 4. SPY made one more move higher, this time to 398.92, which completed Wave 5. This sequence completed as (393.04, 395.14), (394.05, 395.84), (397.41, 398.92), with an R^2 value of .99773. From that point SPY traded in a narrow range between that high and 395.56.

The completion of the 5 wave sequence this morning in turn completed Wave E(Purple), and thus Wave D(Green). This sequence can be seen completing as (390.54, 394.77), (389.40, 392.52), (393.04, 398.92), with an R^2 value of .99818.

 

The completion of Wave D brings us back to the count we have been watching for some time. The target implied by the four completed waves would be between 391.5-390.7. This would then complete Wave D(Red), and and imply lower prices, possibly testing the previous lows. Should this scenario play out, it would look something like a move into the 391.5-390.7 target area, followed by a bounce which could be slight, and then a move below the target area. 

At this point, two alternate scenarios may emerge. The implication of the current structure is bearish. One way to reverse this bearish course is to now break above the Wave D high of 398.92. This would set up a bullish scenario.

That would be the first alternate, with the second alternate pointing to an even more bearish scenario. The target I mentioned for this wave is quite narrow, and in many cases this allows for a "jump" of the target. In essence moving below the target area in this case. This would point to Wave D(Green) being only the first wave of an inverted corrective wave which would carry SPY even lower.

Again, it is difficult to try and get too far ahead of this market. I will continue to closely monitor the situation. The key points for now are the 398.92 high on the upside, and the 391.5-390.7 target on the downside.

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Weekend Update 03/26/2023

 Beginning this discussion with the count from Thursday's 3:00pm low, SPY looks to have completed four waves of a sequence to the upside. In technical parlance this would be described as an expanding triangle, and my model gives a Wave e target between 395.7-398.2.

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For the last few days I have been discussing the re-emergence of a scenario I had relegated to alternate status that now seems to be playing out. As a quick recap, I have counted three waves down from the February 2nd high of 418.31. I had then completed a count showing the March 13th low of 380.65 as the completion of a 5 wave sequence from that high. The alternate scenario entails some complex corrective waves forming from the Wave 3 low. The structure of these corrective waves consisted of the third wave of the correction being longer than the first, and the 4th wave terminating lower than the origin of the first wave. The structure from the Wave 3 low, into the March 13th low contained two such corrective waves, with one possibly having completed Thursday at 399.29. These corrective waves have a very bearish connotation unless it reverses itself and moves above the high of the third wave.

 

Counting from Wave 3(Red), the chart shows three waves up, labeled as Waves A - B and C. From there we have a move down to what I have labeled as Wave A(Green). Originally I had labeled that as Wave D(Red), which may still be the best count. That would infer a move below 377, which would be Wave 4(Red) from 418.31, with Wave 5 to follow. 

The count displayed above would be even more bearish. Taking into account my current target for the current short term wave of 395.7-398.2 would indicate a move below at least 359, depending on the exact termination point of the wave.

Another possibility is that Wave B(Green) is actually a wave A. This would allow SPY to move above the critical 401.48 level, and perhaps reverse the negative connotation of the current wave structure.

We now have some clear levels to watch. If the current short term wave does terminate between 395.7-398.2, and is followed by a move below 390.54, we could see much lower prices in the near future. A move above 401.48 could negate the current scenario.

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Friday Update 03/24/2023

 SPY saw a gap down this morning, opening at 391.98 and falling to a low of 389.40 in the first 20 minutes of trading. The rest of the morning was spent bouncing between that low, and 393. SPY closed the opening gap slightly after noon, and after a small pullback continued steadily higher for the remainder of the day. After hitting a high of 395.84 in the last hour of trading, SPY saw a small pullback before rallying into the close and finishing the day at 395.75.

So far this looks like a corrective sequence from yesterday's Wave 5 low I mentioned yesterday. SPY may be in Wave 5 of that corrective sequence, with a target between today's high, and possibly 398-399. There are a couple of longer term scenarios that I will address in detail over the weekend. The alternate count I have been mentioning the last couple of updates still seems to be in play. Where these next few waves complete could have a major impact on the targets, so I will try and work through some of that also.

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