Monday's Market 09/28/2015

On Friday the SPX opened slightly higher, rising to 1952.89 by mid-afternoon before dropping back to 1921.50. I labeled 1952.89 as Wave D of (C) and 1921.50 as Wave E to complete Wave (C).  In order to be able to reach my 1748 target level, I stated that Wave (D) would now have to complete below 1990. The SPX rallied into then rallied into Friday’s close moving up to 1935.32. Although this rally was admittedly anemic, it would appear that after today’s action this was indeed all of Wave (D).  If this is the case, it would lower my target from below 1748 to below 1721.

The SPX started of lower today and continued lower throughout the day with barely a break. The index first dropped to 1902.85 before bouncing slightly to 1911.00. The next move carried the SPX all the way down to 1880.38. This would appear to be the end of the first wave of the decline.  At that point the SPX bounced to 1890.60, fell further to 1879.21, and then bounced again to 1888.90. This action can be interpreted as the a-b-c waves of an uncompleted inverted corrective wave. From here the SPX should undergo another move lower, followed by another bounce of about 10 points, similar to the 10 point bounce of the a and c waves mentioned above. That would complete the second wave of the decline with the third fourth and fifth waves to follow.

 

Friday's Market 09/25/2015

A lot has happened since Wednesday’s 1949.52 high, so I will get right to it. To review, I had labeled 1949.52 as Wave b from 1979.64. Wave c then completed at 1932.57, Wave d at 1920.60, and Wave e at 1908.92. This competed at 5 wave sequence from 1949.52, and the second wave or Wave [b] from last Friday’s 1953.45 Wave C low. The SPX then completed 3 waves up from that point between yesterday and today as 1924.63-1929.06-1952.89. These can be labeled as Waves [c], [d], and [e] to complete Wave D. Wave E then complete at 1921.50 to complete Wave (C) from the 12/5/2014 2079.46 high as seen on the Daily Chart.

This is the main 5 wave sequence from the 2019.26 high that I see as completing below 1748 sometime after next week. Given this scenario the SPX should now form one more wave to the upside before moving towards that low. This move higher would need to complete below 1990 in order to target a minimum of 1748.

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.