Last Thursday the SPX completed a 5
wave inverted corrective wave at 2071.31. This appeared to complete wave b of
sequence from the 2056.32 low. As it turned out, this was but the first wave of
a more complex corrective sequence. After reaching the 2071.31 low, the index
rebounded to 2078.91 into Thursday’s close. This morning the SPX opened sharply
lower, but held above the 2056.32 low. After falling to 2058.40, the index
rallied to 2078.61 before falling back to 2059.66.
Looking at the structure from
Tuesday’s 2056.32 low gives us wave a at 2074.28, followed by a complex wave b
as 2074.28-2071.31-2078.91-2058.40-2078.61-2059.66. Aside from the formation of
a complex wave b, the interpretation remains the same. The SPX should continue
to rally until it completes a 5 wave sequence near 2106. This should then be
followed by another move lower to 1993+/-.
Longer term the SPX is likely in a
corrective sequence from September’s 2019.26 high. This has turned out to be an
extremely complex corrective wave, and trading should remain choppy for some
time to come. Eventually however the correction should culminate in a move
below 1725.
