Monday's Market 08/04/2014

Excuse the short update today. I have been a little short on time lately. After last week’s big decline, the SPX started tentatively today. The index moved slightly higher, and then slightly lower before going into rally mode.

Looking at the 60 Minute Chart, I have labeled 1985.59 as the end of a 5 wave sequence that was Wave D of an inverted corrective wave. I had then labeled 1952.86 as Wave E of that wave. From that point the SPX has formed a complex wave, with 3 waves up, and 1 wave down completed thus far. It appears that the index is still in a corrective wave from the 1985.59 high, and did not complete the correction at 1952.86. The rally from the 1916.37 low looks to have completed a wave up followed by an inverted corrective wave that may have ended this afternoon.

At the moment I am expecting this rally to reach 1944-1957 before ending. At that point it looks like the SPX will move lower and test the 1916.37 low.

Thursday's Market 07/31/2014

The SPX opened lower today, falling sharply to 1953.42, where it paused briefly, only to resume the decline shortly thereafter. This time the index fell to 1937.46. Again it tried to recover, but it was a weak attempt, making it back only to 1944.19. From there the SPX continued to fall into the close, hitting a low of 1931.09.

The SPX opened right at the 1949-1955 level where it found momentary support. The expected rally from that point did not materialize, and the index broke through that support level quite handily. The next level of support came right at the 1937 level. This was the minimum level the SPX could decline to given my current count. Again that level did not hold, as the index moved lower to 1931.

Given the facts that the SPX had moved into the range to complete a 5 wave sequence from both 1560.33 and 1074.77, and that it has moved below what I considered major support levels, it appears likely that the index has put in a major top. I have not been able to review my charts as completely as I would have liked today, so this is based more on the facts above than a revised count. I still do not see a clear sequence from 1560.33, but at the very least my count from that point is suspect.

To be clear, if this is a top from 1074.77 there should be at least one, and most likely two, moves to the upside before this bull market concludes. I will try to give a more complete analysis in the upcoming days.

Wednesday's Market 07/30/2014

After opening higher, the SPX reached 1978.90 before changing direction. The index quickly declined to 1962.42 before rebounding to 1976.24.

Yesterday I mentioned that I was waiting for some very short term waves to resolve themselves. Part of that began today with the open into the 1978 area I had indicated might be important. This seems to have completed a Wave D from 1979.95. This can be seen as the red A, B, C, and D on the 5 Minute Chart. Wave E has a target of 1945-1955. This target calls into question my count from the 1985.59 high, or Wave D in yellow on the 4 Hour chart. Since this target indicates that the previous low from that high, 1952.86 may be taken out. If that occurs it seems likely that the corrective wave from 1985.59 has not yet completed. I would still expect this wave to remain above 1937.

If this plays out I will explain the implications in more detail. For now, it looks like 1945-1955 is the next target. I would then be looking for a bounce to 1969.

Chart of the Day: