Thursday's Market 05/09/2013

Another day, another all-time high. Again. But this one may be quite different from the others.

The market opened flat today, and then moved lower, with the SPX dropping to 1626.91.That dip was once again met with buying, and the SPX rallied to another all-time high. At that point the market experienced the deepest pullback since it started on this run. The SPX sold off into the support zone I mentioned yesterday, 1623, and then rallied to 1629 before falling back to 1623.09.

As of my count from yesterday, I had a 5 Wave sequence completed from 1581.28 at the high of 1632.78. We had a 5 wave sell-off to 1626.91, a 5 wave advance to 1635.01, and then a drop below 1626.91. That would mean that there were 3 sequences from the 1581.28 low. The best count would therefore be that we saw the completion of Waves 3, 4, and 5 from 1074.77 today.

While I had been expecting a minor correction, followed by new highs, before a major correction, the count from today suggests the major correction may be underway. If the SPX should rise above 1635.01, this count would be proved wrong, but until then I will operate under those assumptions.

Thank you.

Wednesday's Market 05/08/2013

The seemingly endless uptrend from 1581.28 continued today, with the SPX recording yet another record high.

After starting the day to the downside, and working down to 1622.70, the SPX then continued higher, reaching another all-time high at 1631.19. After a pullback to 1626.46, the SPX made one more new high towards the close at 1632.78.

Since the SPX hit 1618.46 last Friday, it has moved ever higher, with only minor pullbacks of 4 to 6 points. Support is at 1623, and 1607. The 1623 support level is interesting in that a move to that level could complete an inverted corrective wave from 1618.46. If that support holds, we could see the market move still higher before the sequence from 1581 finally completes. A level around 1645 would be a target if this were to materialize. I still see this as Wave 3 from 1074.77. When this wave does complete, we should see a minor correction, followed by another move higher before a larger correction.

Thank you.

Tuesday's Market 05/07/2013

It is beginning to sound like a broken record; “Another record setting day on Wall Street. But it was, as the SPX hit another all-time high. I think the markets are ready for a pause here, before resuming the uptrend.

The SPX gapped higher again today, reaching a fresh high at 1623.74 before pulling back. The pullback was pretty steep, but reversed course after closing the opening gap. From there it was more of the same, as the SPX continued higher throughout the day, with only minor pullbacks. After hitting 1626.03, it did pull back into the close.

The SPX formed an inverted corrective wave from yesterday afternoon’s 1619.77 high, and then completed a 5 wave sequence from 1612.85 at 1623.74. This appears to be the end of Wave 3 from 1581.28. The sharp pullback this morning was then Wave 4, and Wave 5 completed at 1624.23. The market was not quite done, however, as it completed a larger degree sequence from 1581.28 at 1626.03. This appears to be the end of the wave from 1581, and most likely Wave 3 from 1074.77. I would expect a pullback at this point, with support at 1621, and then 1609. I would expect that to be the end of Wave 4, which should be followed by one more move higher before a more substantial correction occurs.

Normally with this wave structure, a move below the previous wave 4 (1623.90), signals the top of the wave has occurred. If the SPX falls below 1616.64 I would be fairly certain that the top is in. If the SPX rise above 1626.03, we would most likely see another sequence develop from the 1581.28 low.

Thank you.