Wednesday's Market 09/23/2015

The SPX opened slightly lower, falling to 1937.97 before rebounding to 1949.52. This likely completed a 5 wave sequence from 1929.22 and not the 1945.82 I labeled yesterday. From there the index fell back to 1932.57, before rallying back to 1945.37. Another small dip to 1936.37 preceded a final rebound to 1941.97.

Assuming that 1949.52 completed the second wave a sequence, the drop to 1932.57 and rebound to 1945.37 could be seen as waves 3 and 4. Another drop below 1932.57 and above 1927 would complete the fifth wave, and the sequence from 1979.64. As I stated yesterday, there should then be a rally before another drop lower. If the SPX falls below 1927 then the index is likely still in the third wave from 1979.64.

 

My longer term view of the SPX eventually dropping below 1748 remains unchanged. Once these shorter term waves resolve themselves a more precise forecast should be possible.

Tuesday's Market 09/22/2015

The SPX gapped lower at the open, falling to 1939.75. This was within the 1935-1944 level I mentioned yesterday as possible support. The support was short-live however, as the index soon worked lower. The SPX soon fell to 1932.20, and then to 1929.22. By dropping below the 1935-1944 support, a further drop is indicated.

At 1929.22 the SPX completed a 5 wave sequence from yesterday afternoon’s 1971.66 high, labeled as Wave (c).  From that low the index rose to 1945.82. This looks to complete an inverted corrective wave from 1955.88, meaning the SPX should come under further pressure. At this point the index would now need to complete the sequence from 1979.64. After this completes the SPX should rally before undergoing a further drop to complete either a sequence from2020.86, or Wave E from 2079.46 on the Daily Chart.

 

Once this all completes the SPX should stage one more rally before starting the final leg down to below 1748.