Weekend Market Update 03/05/2023

 For some time I have targeted the 396 level, to be followed by a move the 406-411. SPY spent most of the past two weeks bouncing around the 402-392 level. On Friday we did see SPY finally break above that 402 level. When last I posted, my current count from the 418.31 high was this:

SPY had moved slightly below the level at which I was expecting to see a move higher. The action from the 21st to the 24th was choppy, and difficult to follow at times. Now that it has resolved itself I can revisit this count, and see where we are. After reviewing the count further, I was able to clarify some of the action, and show a slightly revised count here:

The major revision involved seeing Wave E(Purple) as a more extended wave that ended on the 23rd at 402.20. Waves 3,4 and 5(Purple) then completed on the next move lower to 396.25, completing Wave D(Green). From there we can walk through the rest of the count. Wave 1 (Green) completed at 408.51. Wave 2(Green) then completed as an inverted corrective wave, which broke down into A-B-C-D-E, giving us 408.51 - 413.65 - 409.47 - 414.00 - 396.25 - 401.62. Analyzing the sequence (418.51, 413.65), (409.47, 414.00), (396.25, 401.62) gives an R^2 value of .99837.

We can now see that the Green 5 wave sequence completes as 415.05 - 408.51 - 401.62 - 393.64 - 401.29 - 392.33. (415.05, 408.51), (401.62, 393.64), (401.29, 392.33), gives an R^2 value of .99731.

The completion of that sequence is Wave D(Red). Given the four competed waves of this sequence, A-B-C-D(Red), we can now calculate the range in which Wave E(Red should complete. SPY has already entered into that range, with the maximum of that range being 411.19. That level may be an important one, as I will explain.

The above count calls for a high between the the current price levels and 411.19, to be followed by three waves down to complete the 5 wave sequence from the 418.31 high. There is an intriguing alternate count which I will discuss now.

In the current count Wave B(Red) completed on the 10th at 405.01. From that point there are 5 counted waves to the 414.00 high on the 15th. I am currently counting these as Wave C(Red), Wave 1(Green), and Waves A-B-C(Green). This still seems to be the best count, but there is an important alternate count to consider. I currently show the first wave from Wave B(Red) completing at 415.05. A case could be made for that wave having completed slightly earlier, at 412.97, followed by a complex corrective wave to 408.51. Taking that as the high gives the sequence from 405.01 as 405.01 - 412.97 - 408.51 - 413.70 - 409.47 - 414.00. (405.01, 412.97), (408.51, 413.70), (409.47, 414.00), with an R^2 value of .99343. That would put the Wave C(Red) endpoint at 414.00. 

This shows the alternate count using 414.00 as Wave C(Red). I filled in the remainder of the alternate count with "?". Continuing with that count we see that Wave 2(Red) completes as 407.57 - 416.49 - 405.01 - 414.00 - 396.25 - 401.62. (407.57, 416.49), (405.01, 414.00), (396.25, 401.62) gives us an R^2 value of .99636. The entire 5 wave sequence from 418.31 can then be seen as 418.31 - 407.57 - 401.62 - 393.64 - 401.29 - 392.33. (418.31, 407.57), (401.62, 393.64), (401.29, 392.33) gives an R^2 value of .99632.

It seems that SPY is at an inflection point here, which makes the current price levels extremely important. A move above the 411.19 upper limit I discussed earlier would likely make the alternate count I have discussed the correct count. 

There is some further evidence of a bottom having been put in at 392.33. In my TSLA update yesterday I discussed one method for determining a likely limit for a corrective wave using the previous low, the correction low, and the last two high of the previous wave. The 392.33 low would satisfy that method. SPY has also given a technical buy signal on the daily chart. We will see if those hold over the coming days.

TSLA Weekend Update

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TSLA Weekend Update 03/04/2023

 In Tuesday's Update, my analysis was that TSLA had completed 5 waves of a 5 wave sequence from 101.81, and set a target between 212-234. I gave 191.78 as a point at which that analysis would be invalidated. Wednesday saw TSLA move lower from the opening, falling to a low of 198.52. During the afternoon TSLA moved mostly sideways, with a slight upward bias, rising to 203.42, before closing at 202.75. Technically TSLA hit oversold at the open on the 15 minute chart, and the sideways move into the close worked off that oversold condition, and worked into overbought territory, setting up a lower low, lower high situation going into Thursday.

Given that set-up, TSLA gapped down on Thursday, dropping to 186.01, and moving below the critical 191.78 level necessitating a revision to my analysis. Once again TSLA moved mostly sideways the remainder of the day, rallying slightly off the low, and then falling again into the afternoon. This action created a short term buy signal at 3:45 on my technical charts, with TSLA at 191.07. 

TSLA gapped up on Friday, opening at 194.61, and continuing to rise through most of the day. My short term technical signals gave a cover at 199.13. TSLA topped at 200.48, before giving back a little ground into the close.

With TSLA moving below the 191.78 level, we will need to review our analysis. I will begin where I left off on Tuesday. 

Here is my count from Tuesday. As you can see, I had TSLA in Wave 3 of Wave 5 from 101.81, with a target of 212-234. Obviously this was wrong. One thing I had noticed on Tuesday, but had discounted, was the initial move off the Wave 4(Green) low on the 22nd. If that initial move were Waves 1,2, and 3, instead of Wave 1, the wave from Wave 2, the move following the low marked Wave 2(Red) on the 28th to the upper Bollinger Band would complete a 5 wave sequence from that Wave 4 low. This would look like 191.78 - 201.99 - 196.82 - 205.14 - 203.75 - 209.41. Taking those as points, and applying a linear regression, we get (191.78, 201.99), (196.82, 205.14), (203.75, 209.41), with an R^2 value of .99998. The move from Wave 4 would now look like this:

As you can now see, TSLA completed a 5 wave sequence from the 191.78 Wave 4 low. I had originally discounted this for two reasons. The first being that it would require a wave 5 failure, as it would not complete at the high, which is rare, and the second being that it did not meet the requirements for Wave 5. So now we must re-evaluate the count from the 101.81 low.

This had been my count going into Wednesday. For the sake of clarity I removed the smaller waves from Wave 4, and marked the end of the 5 wave sequence from that point with "X". The initial move is notated by Wave 1. Following the green A-B-C-D-E, will lead you through what I had counted a an inverted corrective Wave 2. This took the form (123.52. 115.60), (136.68, 124.31), (214.00, 187.61), with an R^2 value of .9943. Normally the first instance of sequence exceeding the R^2>.99 threshold denotes the end of a sequence. However, that is not always the case. If one looks at the sequence B-C-D-E-3-4, one would notice that this also forms a sequence with an R^2 value over .99. Namely (136.68, 124.31), (214.00, 187.61), (217.65, 191.78), with an R^2 value of .99978. Changing A and C to 2 and 3 respectively, and following that with an inverted corrective Wave 4, results in this chart:

Now we can evaluate the sequence 1-2-3-4-X from 101.81. With Wave X terminating at 209.41, we have (101.81, 123.52), (115.60, 136.68), (191.78, 209.41) with an R^2 value of 1. Thus we have a 5 wave sequence from 101.81 completing at 209.41.

The decline from the 209.41 high formed a 5 wave sequence down to the subsequent 186.01 low as is seen here:

One method of creating a target range for a corrective wave is to look at a relationship between the origin of the previous wave, the subsequent corrective low, and two highs from the previous wave, normally the last two highs, as depicted here:

Using this method gives a range between 178-188 for the correction from the 209.41 high. Thursday's 186.01 low falls right into that range. While still too early to call that a low, it is quite possible.

Technically, TSLA is close to giving a buy signal on the 15 minute chart, but has not as of yet. On the 60 minute chart the stock has reached overbought, and on the Daily chart it is oversold, and close to giving a buy signal. The action over the next few days should give us some insight into short and longer term direction. 

Weekend Market Update

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TSLA Tuesday Update 02/28/2023

 If you read Monday's Update, you had a pretty good roadmap for today's session. In that update I said I was expecting a move higher at the open, followed by a 6-8 point pullback. TSLA did open higher, gapping up and hitting a high of 211.23. It is notable that it stopped just shy of the 212 lower bound that would end the sequence from the 101.81 low. It is nice when a forecast comes to fruition, but obviously they will not all be that good. But the accuracy does speak to the forecasting power of my model. Some set-ups lend themselves to highly accurate forecasts, while others are more difficult. I thought I would walk through what I saw yesterday in the set-up, and how I was able to arrive at those forecasts.

 

Going into today's session, this was the set-up. On the lower left side of the chart you will see a 4 on the 22nd. I will start there. My count has Wave 1 completing on the open of the 23rd. The next labels you will see are for Waves A, B, and C. These are the first 3 waves of a 5 wave sequence. From Wave C, there are labels for the first three waves of a lower level sequence, Waves 1, 2, and 3. After that another sequence with Waves A, B, C, and D labeled. From Wave D, you will notice a slight pullback into the close. My model is based on a simple premise: Namely that when waves are taken as points, with coordinates (Startpoint, Endpoint), and a linear regression is applied to those waves, a wave completes when the first, third, and fifth waves of a sequence have an R^2 value above .99.

I will start with the final A-B-C-D sequence on the chart. The previous Wave 3 is our start point, so we have 197.67-194.00-208.22-204.22-209.42. Taken as points, that gives, (197.67, 194.00), (208.22, 204.22), (209.42, X), where X would be the Wave E completion point. The pullback at the end of yesterday's session had a low point of 206.35. Using that as X, the resulting linear regression gives an R^2 value of .9952, above the .99 threshold. This allowed me to consider that as the endpoint of the sequence.

The A-B-C-D-E sequence was then the end of Wave 4 of the 1-2-3 sequence started on the 24th. So we have (192.80, 195.67), (193.58, 197.67), (206.35, X). The minimum value for X that gives an R^2 value above .99 for that regression is 208.02. This gave a me a minimum value for today's opening move up. The high of that move, 211.23 gives an R^2 value of .9955.

That opening move to 211.23 thus completed the 5 wave sequence from Wave C on the 24th, or Wave D. Given the four completed waves, the sequence is (205.14, 196.33), (203.28, 192.80), (211.23. X). Being able to infer today's opening move allowed be to extrapolate that into the 6-8 point pullback, since it would be completing the inverted corrective wave starting with Wave 1 on the 23rd. The pullback to 203.75 was just under 8 points, and gave the sequence an R^2 value of .99086.

The final count after that is shown here:

Looking at today's action, we had the opening rise to 211.23, followed by a pullback to 203.75. That sequence looked like, (211.23,206.43), (208.43, 204.71), (206.19, 203.75), with an R^2 value of .99038. From there the market moved higher again, tracing out a five wave sequence as (203.75, 206.33), (204.86, 207.88), (206.31, 209.41), with an R^2 value of .99357. After that TSLA moved lower, dipping to 204.91, before trying to rally into the close.

In my current count from the 101.81 low, TSLA has now completed four waves of a five wave sequence, with Wave 4 completing at 191.78. Today's low would be the completion of Wave 2 from that Wave 4 low. With four waves completed, we can project Wave 5 to complete between 212, and 234. That remains my current target. Some of my work shows a convergence around 229, but any move between 212, and 234 would be sufficient to complete the sequence. The 191.78 Wave 4 low would be a critical point. A move below that would require a revision to the current count.

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TSLA Update 02/27/2023

 Friday saw a gap down for TSLA, falling to 192.80 shortly after the open. TSLA then traded in a narrow range, with a slight upward bias, throughout the day. The fact that Thursday's 191.78 low held was important, as that is my Wave 4 low, and a break below 187.61 would invalidate the count, and likely mean a top was in. After holding those levels, TSLA moved markedly higher at the open, gapping up to 208.22 before a slight pullback. Another move higher brought the stock to 209.42, which proved to be the high of the day. From there TSLA fell slightly into the close, ending the session at 207.60.

A very short term count would call for a move higher from the close, followed by a pullback of 6 to 8 points. This move higher has a lower limit just below today's high, but the upper limit gives it a large range to work with. That would set up a final move into the 212-234 target area mentioned Thursday. On a cautionary note, another move higher at the open could put TSLA in that target range, so close monitoring will be needed from this point. One possibility would be for the initial move higher to carry to a point where the 6-8 point pullback keeps it above the 212 target. 

On the downside, I am watching the 191.78 and 187.61 levels. A break of those would seem to be near term bearish. Should be an interesting couple of days.

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Monday Update 02/27/2023

 In Thursday's Update I mentioned the possibility of another move down for SPY, probably below 396, followed by a move higher. Friday opened with a gap down, opening just below that 396 level at 395.54. Most of the day was spent bouncing around the 394-396 level, with only a couple of failed attempts to break through that 396 level. Today opened on a firmer note, with SPY gapping up back to the 400 level. I have also mentioned 402 as a near term resistance level, and SPY reached 401.29 before spending the rest of the session giving back most of those gains, falling back to 396.75 before rallying slightly into the close.

 Friday's drop below 394 was slightly more than I was anticipating, which again still leaves several possibilities from this point. There is still short term resistance at the 402-403 level. The primary short term count still calls for SPY 406-411, but the 402-403 may be all it can muster. 

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TSLA 02/23/2023

 TSLA continued the rally off yesterday's low at the open. A gap up brought it to 205.14. That proved to be the high of the day, as TSLA soon dropped back to 196.33, before working higher through the afternoon, closing at 201.99.

My count from yesterday's update remains the same, as I am still looking for a move to 212 - 234. Please help fund further research.

Thursday's Market Update.

Thursday Market Update 02/23/2023

 After finishing yesterday's down day in decidedly oversold territory, they market started with a bang today. A gap up opening took SPY to 402.20 within the first half hour. That initial enthusiasm soon faded, as SPY then tracked down below yesterday's low to 396.35 just after noon. After that the market regained it's footing and rallied back near the opening high to 401.62, before selling off slightly at the close. It fell back near the 400 level at 400.41 before closing at 400.64.

When the market opened higher above the 402 level, it looked like we were on our way to the 407 - 412 area I mentioned yesterday. But the decline below yesterday's low took care of that in a hurry. The start of this wave from 418.31 was choppy, and so several  counts are possible. One such count I outlined above, as the February 14-16 action can be counted as A-B-C of an inverted corrective wave. Today's opening move higher was Wave E and the decline then finished Wave D from the 14th. The conservative count from here still calls for a move to 406 - 411, followed by another move lower, probably below 396. 

A second count would call for a move back down to the 396 level from here, before commencing the rally to the 406 - 411 level. A third count points to today's low as being the completion of a 5 wave sequence from the 418.31 high.

The 402 area has proven to be a resistance area, and you will notice that many of these wave options see that as a significant point. The same can be said for the 396 level. The 406 - 411 level seems to be the next area of interest. If that level holds, a move down to 396 looks probable. A break above that level could point to today being the end of the 5 wave sequence.

Wednesday's Update

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TSLA Update 02/22/2021

 I was a little early on the Wave 4 low the other day. Today's low of 191.78 still keeps the count intact, with the only change being a slight change to the Wave 5 high. I would now set my target between 212 - 234.

Both the RSI and MACD look positive after today's action. 

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Wednesday Market Update

Market Update 02/22/2023

 Given the oversold conditions the market closed at on Tuesday, it would not have been unexpected for the market to attempt a rally this morning. Initially it did, as the market opened slightly higher to just above the 400 level. That was short-lived however, as the market soon resumed it's downward trajectory, falling once again below the 400 level to 397.62. Another, more sustained rally took hold from there, and the market enjoyed a steady rise to near the 401 level ahead of the Fed Minutes. The market swung higher and lower immediately following the release of those minutes, before again deciding on a downward path. SPY once again tested the 397 level right before the close, before rallying to close at 398.60.

Yesterday I mentioned the shorter time frame charts being noisy. Today's action seemed to clarify some of that, and while still noisy in spots, some things have come into clearer focus. Counting from the recent 418.31 high, I am counting the initial move down to 407.57 as Wave 1 of this move lower. The market then moved in sideways fashion to 416.49 - 405.01 - 415.05, which can be counted as Waves A - B - C of an inverted corrective wave. After that, the entire move down to today's low of 397.02 can be counted as a 5 wave sequence for Wave D.

 

In the short-term this count implies a move higher. Given the structure of the inverted corrective wave to this point, the Wave E target would be between 407 - 412. From that point we may see another move down. My work still shows a downside target somewhere below 396. For now I'll leave it there and follow this a wave at a time.

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TSLA Update

Tuesday's Market 02/21/2023

 The market got off to a rocky start with a gap down opening. SPY hit 403.15 shortly before the open, and made a feeble attempt at a recovery during the opening 15 minutes. This recovery could only lift SPY slightly more than a point before it resumed to the downside. This slide lasted into the afternoon with hardly an attempt at a rally. SPY fell below the 400.00 level dropping to 398.82 before another attempt to the upside was mounted. The 400.00 level then turned into resistance, as SPY topped at 400.16 before falling once again into the close. It closed at 399.14, only slightly above the worst levels of the day.

Looking at the daily chart, one can count a completed 5 wave sequence from the 10/13/2023 low of 348.11 to the 2/2/2023 high of 418.31. This sequence can be counted as 348.11-390.39-368.79-410.49-374.77-418.31. This sequence has an R^2 value of .9965, which satisfies my model. 

The first thing I notice about this sequence is that it lacks an extended corrective wave, which one would normally see during an impulse wave. Thus it give the appearance of an A-B-C correction from the 348.11 low. If one draws a tend line connecting the 348.11 low and the 374.77 low, one will notice that the market came very close to that line today, indicating that we may be at an important juncture. 

Technically, the Daily SPY chart shows an oversold condition on the RSI, but the MACD shows a bearish crossover. 

The shorter term charts have been less clear. One possible count shows a short term 5 wave sequence could complete between 396-386, but the technical action may provide better clarity to shorter term direction. 

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One More Move Higher for TSLA?

 TSLA has been on a relentless tear since putting in a low at 101.81. After an initial move higher to 123.52, TSLA moved sideways, bottoming at 115.60. From that point it was almost a straight line up to 214.00, with only short pauses along the way. Once hitting 214.00, TSLA had a slightly deeper correction to 187.61. That did not last long, however, as the stock quickly recovered and out in a new high at 217.65.

My analysis shows Wave 3 of a 5 wave sequence completing at that 217.65 high. The subsequent pullback to 197.50 was likely Wave 4, with Wave 5 currently underway. If this count is correct Wave 5 should carry TSLA to a new move high. The maximum price for the sequence as described would be 240.00.

TSLA appears to be in Wave 5 of the current 5 wave sequence, and should complete this sequence between 217.65, and 240.00. A move below the previous 197.50 low would likely mean that the sequence has completed. After this move, I would look for a more substantial pullback.

 

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Wednesday 04/15/2020

As of Friday's close, I made my case for the possibility of the SPX having completed a 5 wave sequence from the 2191.86 low. Given my count from that low, there is an upper limit of 2888 for this wave to complete.

On Monday, instead of continuing down from Friday's 2818.57 high, the index gapped up at the open, and then continued to move higher through the day, finally topping out at 2851.85. Friday's high of 2818.75 still looks to have completed a 5 wave sequence from the 2447.49 Wave 4 low. But it does look like that only completed a first wave from that low. Looking at the SPX from the 2818.57 high, the index first dropped to 2721.17 on Friday. The initial move higher on Monday took the index to 2843.83 with a subsequent move lower to 2807.89. Finally the SPX made another push higher to 2851.85. From the Wave 4 2447.49 low, the SPX thus has formed 5 waves, (2447.49, 2818.57), (2721.17, 2843.83), (2807.89, 2851.85), which has an R^2 value of 1. At times waves will form such a structure, or a structure that creates a trap.

So taking the waves from the 2191.86 low to the 2851.85 high, gives, (2191.86, 2300.73), (2360.25, 2641.39), (2447.49, 2851.85). This is still under the 2888 upper limit, and has an R^2 value of .9979.

This morning saw the SPX gap down, moving into oversold territory on the RSI(5), and then staged something of a recovery to hit overbought, without making a new high on the SPX. This suggests another move down. The level I am watching to the upside remains 2888.

Market Meanderings 04/12/2020

On Wednesday, it looked like the SPX had completed a 5 wave sequence from the 2657.67 low, and was poised to  to move lower. Instead, on Thursday, the SPX opened higher, moved up to 2818.57, and then began to fall back into the close.

If we look at the move from 2657.67, we can see an initial move up to 2729.55. From there the SPX pulled back to 2708.35, before rising again to 2754.09. After another pullback, the index rose again to 2813.07, before another pullback to 2778.76. Looking more closely at the three pullbacks following the 2729.55 high, we have (2729.55, 2708.35), (2754.09, 2729.52), (2813.07, 2778.76), which has an R^2 value of .9999. Given that, the best interpretation is that the SPX formed another inverted corrective wave for wave 4.

Widening out, and then looking at the wave structure from 2447.49 we have (2447.49, 2538.18), (2657.67, 2729.55), (2778.76, 2818.57), which has an R^2 value of .9971, which would satisfy conditions for the completion of that wave. And since that is still within the range that would satisfy a completion of a 5 wave sequence from 2191.86 low, it still appears that the SPX has completed that sequence.

The negative technical picture I elaborated on Wednesday essentially remains the same. On the 15 Minute chart, a negative divergence arose, and near Wednesday's close, the SPX moved to oversold on that chart, and then moved above 50, without moving to a new high. This could possibly be the start of a move down.

The negative divergence on the 60 Minute chart remains, and the Daily chart shows the SPX having moved into overbought territory on the RSI(5). On Wednesday the SPX had remained below 50 on the Weekly chart, but the slight move higher on Thursday brought that above 50 on the RSI(5), one more indication of at least a short term top.

If the SPX continues to move higher, the best interpretation would be to take the entire move from 2657.67 to 2818.57 as wave 3 from the 2447.49 low. The pullback to 2762.36 could then possibly be wave 4. I bring this possibility up, because the minimum projection for wave 5 under this scenario would be 2908, above the 2888 upper limit for a wave 5 from the 2191.86 low. That could indicate that this move has a ways to go on the upside.

Wednesday 04/08/2020

With the likely end of a corrective wave on Tuesday at 2657.67, the expectation was for a move higher today. The SPX did move higher this morning to 2696.23 before falling back to 2663.30. The index then began a methodical move higher for much of the rest of the day. The first peak came at 2729.55 as the RSI(5) reached overbought. A pullback to 2708.35 brought the RSI(5) back below 50, and as it rose above that level it gave the first indication that 2729.55 may have been wave 3, and 2708.35 wave 4 of the sequence from 2447.49. The SPX then moved slightly above yesterday's high, to 2760.75. The RSI(5) hit oversold shortly before that, and then formed a negative divergence.

Looking at the wave structure from 2447.49, and the previously identified waves, the points are (2447.49, 2538.18), (2657.67, 2729.55), and (2708.38, 2760.75), which has an R^2 value of .997. So the criteria for a completed wave was met at SPX 2760.75.

I had previously given a range of 2755 - 2888 as the target for the 5 wave sequence from the 2191.86 low. That was also met at SPX 2760.75. This wave structure had the points (2191.86, 2300.73), (2360.25, 2641.39), and (2447.49, 2760.75), with an R^2 value of .992. Once again, the criteria for a completed wave from that low has been satisfied.

Interesting that the Wave 5 top was very similar in nature to the wave 3 top at 2641.39. With that wave there was a wave d peak at 2637.01, followed by a pullback, and then a lackluster 3 wave move to marginal new highs. Wave 5 had a wave d peak at 2746.03, followed by a pullback, and then a lackluster 3 wave move to marginal new highs.

I outlined the technical indications for the 15 Minute chart, and with today's high possibly being a significant top, I thought I would provide some of the technical indications that would tend to support this analysis.

The 60 Minute chart shows that the SPX formed a negative divergence on the RSI(5) with today's marginal new high, which many times indicates a move lower to at least oversold levels.

Finally, a look at the Daily chart shows that the RSI(5) also reached overbought today.

Putting all of this together, my 5WaveModel suggests the SPX completed a wave today from 2447.49. This completed within the range identified as the end point of a 5 wave sequence from the 2191.86 low, suggesting an end to that move. A negative divergence has formed on both the 15 Minute chart, and the 60 Minute chart. The Daily chart shows the SPX in overbought territory. The 15 Minute, 60 Minute, and Daily charts all show the SPX either in, or coming off of, overbought territory. And there is the prospect of a long weekend after tomorrow. Recently there has seemed to be a reluctance to hold longs over the weekend. While none of this guarantees a top is in place, there are ample indications to be at least cautious, at least in my mind.

From here I am looking for supportive market action to confirm my analysis. When and if that materializes, I will give some thoughts on the next move.

Tuesday 04/07/2020

It was another gap up opening for the SPX. After opening at 2738.65, the index rose to 2756.89 before falling back. That proved to be the high of the day, and after the higher open, the SPX spent the rest of the day giving back all of it's gains. It didn't take long for the SPX to drop back to 2688.03 before trying to regroup and move higher. It did rally to 2746.03, but after that it was all downhill. An hour before the close the index was at 2669.55, erasing all of it's gains. The last hour was spent trying to break back into positive territory, but every rally was met with more selling. The SPX hit the low of the day at 2657.67, and closed only slightly above that level.

Going into this morning I was looking for a wave 5 from the 2447.49 low to complete either at Monday's high, or possible up to 2692. This morning's opening move to 2756.89 was obviously higher than I was looking for. So a review of the chart was in order:

Looking at the entire wave structure, the SPX made it's first move to 2475.51 off that low. From there, one can count 4 pullbacks before yesterday. 2475.51-2464.39, 2488.78 - 2466.10, 2614.54 - 2594.55, and 2636.28 - 2620.52. Taking the first 3 as points, (2475.51, 2464.39), (2488.78, 2466.10), (2614.54, 2594.55), gives an R^2 value of .9943, which satisfies my model for a 5 wave sequence. Taking the last 3 sets, (2488.78, 2466.10), (2614.54, 2594.55), and (2636.28, 2620.52) gives an R^2 value of .9995, which also would satisfy my model. I usually label sequences as they complete, and so the first 3 pullbacks were labeled as a-b-c-d-e(2). So the entire wave structure was 1-a-b-c-d-e(2)-3-4. This resulted in the wave projection I gave last night. Equally possible would be 1-2-3-a-b-c-d-e(4), as the last 3 pullbacks qualify as a completed sequence. Using that count, 2756.89 would satisfy the conditions for a 5 wave sequence. As (2459.96, 2475.51), (2464.39, 2488.78), (2620.52, 2756.89) yields an R^2 value of .9997.

With the wave from 2459.96 completed at 2756.89, the next move would be a pullback. As we saw today, the SPX did pull back, in what appears as 3 waves from that high; 2688.03 - 2746.03 - 2657.67. This also brought the SPX into oversold territory on the 15 minute chart.

Taking the pullback from wave 1 which was 2538.18 to 2459.96, and the 3 waves of today's pullback gives (2538.18, 2459.96), 2759.89, 2688.03), (2746.03, 2657.67) gives an R^2 value of .9938. So it looks like the SPX has completed waves 1-a-b-c-d-e(2). The next move appears to be up.

The SPX now seems to be in the last stages of Wave 5 from the 2191.86 low. While I am still looking for higher levels, those higher levels may be minimal. My target for this wave remains 2755 - 2888, a level that the SPX already reached this morning when it hit 2756.89. Unless the SPX manages to move above 2888, I view this as the index reaching the end of this move higher. There are always alternatives of course, but I'll wait until this wave completes before getting into any of those.

Monday 04/06/2020

On Friday I described the decline from 2538.18 to 2459.96 as a complete 5 wave sequence. From that point, in the last hour and a half of Friday's session, the SPX did some technically productive work, putting a series of higher highs, and lower lows on the 5 minute chart.

This morning the SPX continued that positive tone in a big way. A gap up at the open, to 2578.28, started the day off, and the index continued higher right until the close, with only minor pullbacks along the way. From the 2459.96 low, the SPX looked to have formed a wave 1, followed by waves a, b, and c of 2, an inverted corrected wave. The opening surge to the SPX to 2614.54, making wave d of wave 2, and the pullback to 2494.55 completed wave d, and the entirety of wave 2. It then looks like the move higher to 2636.28 formed wave 3, the pullback to 2620.52 wave 4, and the push up to 2676.85 near the close could be wave 5. The 5 waves outlined above satisfy my model for the completion of a 5 wave sequence, and the SPX is in overbought territory on the short term charts. Using my thresholds, this wave could complete anywhere from today's high of 2676.85, on up to a maximum level of 2692. So it is conceivable we see a continuation at the outset tomorrow.

On Friday I mentioned a slight adjustment to my count from the 2191.86 low. The adjustment affects Wave 3, which started at 2360.25. I originally had called 2637.01 as the end of that wave, but after some review, I would label that as wave d of 2 of an inverted corrected wave, the pullback to 2520.02 as the completion of wave 2, and then the three waves up to 2641.39 as waves 3,4, and 5, completing the wave from 2360.25. The move from 2641.39 down to 2447.49 still counts as a 5 wave sequence from 2641.39 to 2447.49, so the only thing this does is slightly alter the range for the completion of wave 5. I had been mentioning 2749 to 2886 for that range, but will change that to 2755 to 2888.

So to review, I see the SPX as having completed 4 waves from the 2191.86 low. The target range for wave 5 is between 2755 and 2888. Wave 4 of this sequence completed at 2447.49. Wave 1 of 5 completed at 2538.18. The second "wave" completed at 2459.96. This could be wave 2, or wave a of in inverted corrective wave.  The third wave of the sequence is in progress, and will complete either with today's high, or possibly up to 2692. At that point the index should pull back before continuing higher.

Friday 04/03/2020

The SPX opened slightly lower this morning, before moving higher, to slightly above yesterday's high to 2538.18. From there it was all downhill, as it has mostly been on Fridays. Seems like no one wants to carry their longs into the weekends. So except for a few very minor rallies, the index went pretty much straight down from 2538.18 to the low of the day at 2459.96. The SPX did then move slightly higher into the close, making it back to 2497.10 shortly before the close.

Picking up on the count from where I left off yesterday, the SPX had completed Wave 2 from the 2447.49 low, and was moving higher in what appeared to be wave 3. With the move to slightly higher levels this morning, the index looks like it actually completed waves 3 and 4 yesterday, and wave 5 of the sequence this morning. The entire sequence would the be 2447.49 - 2488.09 - 2467.68 - 2509.07- 2492.10 - 2538.18.

Looking at the move from this morning's high of 2538.18 to the low of 2459.96, it looks the SPX completed a 5 wave sequence to the downside. Wave 1 ended at 2495.78. Wave 2 was the meandering inverted corrective wave that terminated at 2487.72. Waves 3, 4, and 5 then followed at 2464.42 - 2473.97 - 2459.96.

So my ongoing count is still intact. From the 2191.86 low, the SPX completed the first wave at 2300.73. The index then formed an inverted corrective wave 2 the ended at 2360.25. My count then has wave 3 ending at 2637.01. In looking at it again today, there is a count that has wave 3 completing at 2641.39. Either way, there is a 5 wave count down, that ends at 2447.49, for the fourth wave. I'll cover that in more detail this weekend. So this count suggests the SPX will rise in a wave 5, with a target of 2749 - 2889.

Thursday 04/02/2020

The SPX opened slightly lower this morning, but quickly reversed to move above yesterday's close, before once again moving lower to 2455.79. At that point the index found some direction, rising steadily to 2532.21. From there the SPX moved sideways for the next couple of hours before falling to 2467.68. After that the index once again moved steadily higher into the close, moving back up to 2530.13, before dipping into the close.

Although the SPX did move lower at the onset, it did hold yesterday's 2447.49 low. Today's action can best be viewed as a wave 1 from that low to 2488.09. Most of the rest of the day was then spent working on the inverted corrective wave 2, which looks to have ended at 2467.68. That would now put the SPX in a wave 3 from that low. Since the index did end the day in overbought territory on the 15 minute chart, the 3 waves off the low could possibly be part of a corrective wave, so the 2447.49 low remains important.

I am still viewing this as the start of wave 5 from the 2191.86 low. A move below 2360.25 would invalidate that count. Until then my short term target remains 2749 to 2889.

Wednesday 04/01/2020

Sorry I missed posting last night. I try not to interject personal things or opinions into the blog, because my objective is to analyze the market as best I can. While the rest of Illinois is under a "stay at home" order, I happen to work for an "essential business", and so, luckily, or unluckily, still working. Not in the medical profession, so not one of the "heroes", but it has been busier than usual. So doing my best to keep myself safe, and more importantly, more "at risk"loved ones safe. Hope everyone is doing the same. All about priorities.

But enough of that. Numbers keep me sane, so let's get to that.

Picking up where I left off, I mentioned on Monday that the 2631.80 high on the SPX might have completed a 5 wave sequence from the 2520.02 low. On Tuesday the SPX did open slightly lower, but soon moved higher, topping out at 2641.39. This was slightly above Friday's 2637.01 high, and looked like it might be a breakout to the upside. However, the index quickly reversed course, dropping to 2588.90, recovering a bit, then dropping again to 2571.15 before staging a small recovery into the close.

This morning the SPX gapped down at the open, dropping to 2486.22. After a short-lived rally attempt, the index fell to 2466.99, rose to 2494.67, and then fell to the low of the day at 2447.49 near the close.

My count from the 2191.86 low remains intact. I had mentioned that the SPX may have to correct from the 5 wave sequence starting at 2360.25, and ending at 2637.01. The support levels I gave for this scenario were 2482 first, and then 2402. As I have mentioned, some of these support levels are a work in progress. The levels I mentioned were derived using 2360.25 as the initial point. I noticed tonight that by using 2191.86 as the initial point, it would give 2443 as the ideal level, fairly close to today's 2447.49 low. Something for me to take note of.

So continuing my count from the 2191.49 low, the SPX completed Wave 1 at 2300.73. After an inverted corrected wave from there to 2360.25, the index then completed a 5 wave sequence at 2637.01 for Wave 3. The entire move from that high to today's low of 2447.49 would be Wave 4. If correct, that would mean that the SPX is about to embark on Wave 5. Given the wave structure thus far, Wave 5 would project to between 2749 and 2889.

With the markets as they are, and everything going on, I feel it is as important, if not more so, to know when you are wrong, as when you are right. So in that vein, a drop below 2360.25 would invalidate the count. Otherwise I am looking for the SPX to move up to the 2749 - 2889 level.

Monday 03/30/2020

At the open, The SPX rebounded slightly from Friday's late afternoon sell-off. Seems as though a lot of people are wary of holding longs over the weekend. After closing at 2540.21 on Friday, the SPX jumped to 2580.76 near the open, then settled down, trading sideways before continuing the move higher to 2611.93 before pulling back slightly to 2588.88. The index continued higher after that hitting 2680.31 before setting into the close at 2626.04.

For most of the last two days the SPX has traded within a range bounded by last Thursday's 2637.01 high, and Friday's early morning low of 2520.02. Today's move failed to breakout to a new short term high, so a move to slightly lower levels is still possible. My count from the weekend remains unchanged. From the 2191.86 low, the SPX completed Wave1at 2300.73. From there index formed an inverted corrective Wave 2, which ended at 2360.25. The SPX then rose in a 5 wave sequence to 2637.01 to complete Wave 3. Wave 4 may have ended with the small pullback to 2520.02, but without the index moving above 2637.01 that remains unconfirmed.

Until the end of Wave 4 is known, precise projections for Wave 5 cannot be made, but in an effort to give some interim targets, I will run through a couple of scenarios. If Friday's low of 2520.02 completed Wave 4, my current count would suggest a Wave 5 high of 2956 - 3089. But if that low holds, it also presents an alternate count suggesting 2690-2771 as the high. So a couple of levels to work with.

Shorter term, today's 2631.80 high may have completed a 5 wave sequence from 2520.02. I've hus added some short term support levels at 2584, and 2548.

If the SPX moves below 2520.02, support is at 2482, and 2402.

Market Meanderings 03/29/2020

It looks like I was premature in calling 2571.42 the completion of a 5 wave sequence from the 2191.86 low. Looking at the entire move from 2191.86 to 2637.01, one could make a case for the completion of a sequence. The three waves 2191.86 - 2300.73, 2407.53 - 2571.42, 2465.20 - 2637.01 would satisfy my model, however there are some issues with that count. First, the corrective wave still looks to be as originally labeled, from 2300.73 - 2630.25. In order for the the three waves mentioned to complete a sequence, the first three pullbacks, 2300.73 - 2198.98, 2436.88 - 2360.25, and 2501.57 - 2407.53, would also need to complete a sequence to from the corrective wave, and they fall just short of my model's threshold for that.

Keeping the original count intact, the subsequent move from 2360.25 to the high of 2637.01 does complete a 5 wave sequence, and so it would appear that only three of five waves have completed thus far. Support looks to be 2482.

Looking at the 60 Minute chart, I did update it to reflect the alternate count I had mentioned. The first move down from 3393.52 contained Waves 1, and 3, separated by a corrective sequence. So both Waves 2, and 4 completed corrective sequences.

The Weekly chart reflects my view that 3393.52 completed a 5 wave sequence from the 666.79 low. With a 5 wave sequence down from that high, the market looks to be at an inflection point. Was 2191.86 the low? Or simply a resting point? Things could be interesting from here, as the market always is.

I was asked in a comment recently how and why I turn waves into points for my analysis. Since I sometimes have trouble fitting my answer into the comments section, I'll try to answer it here. First, I do see markets moving in waves. When I started, discerning waves was somewhat subjective. I have attempted EW and other methods, so I tried to incorporate some of that. Through the years I have tried to become more objective in my methods, and I do use several technical indicators to help guide me. Most of my main waves seem to be consistent with more traditional methods, and I have used other counts I respected to ensure my model was not dependent on arbitrarily picking points. At times there is a bit of tracking smaller structures for my counts, and I won't go into a great amount of detail on that at the moment, but sometimes one must look at several time frames to see the entire picture.

So that is a little background on what I strive to do. As for turning waves into points, I don't know at what point I started doing that. I have for a long time looked for an objective way to find the ends of waves. At some point I noticed that visually there seemed to be some correlation between certain waves. Waves seemed to either all get longer, or shorter, but there seemed to be no real relationship between them, when taken as absolute moves in points. Then I realized through some work that the increase, or decrease, in the waves was dependent on the difference in the starting points of the waves. So although I use a linear relationship as the basis for my model, that does not make the moves in the market linear. Looking at waves as points is just the easiest way I have found to be able to use that relationship to extrapolate end points.

That is the easiest way I can describe it. And using the linear relationship is the easiest way I have found to track that relationship. I hope that answered the question. I'd be happy to go into more detail to anyone who is interested. Feel free to comment or email. I will try to address any questions as best I can.

Wednesday 03/25/2020

The SPX opened higher today, moving above yesterday's high to 2501.57. After a slight pullback, the index powered higher, hitting the high of the day at 2571.42. From there the SPX moved slightly lower into the close.

From the 2191.86 low, the SPX looks to have completed a 5 wave sequence at 2571.42. This traced out as 2191.86 - 2300.73 - 2360.25 - 2501.57 - 2407.53 - 2571.42. Wave 2 of this sequence was the inverted corrective wave. With a 5 wave sequence likely completing, a pullback would be in order. So it looks like decision time will be setting up shortly. New lows, a continued rally? Looks like we will find out shortly.

We might see a pullback at this point. Support may come in between 2368 and 2401,

Tuesday 03/24/2020

Going into today's trading, I had viewed yesterday's 2191.86 low as wave d of a 5 wave sequence, looking for wave e to then terminate between 2389 and 2409. The SPX opened significantly higher, reaching 2387.98 within the first hour, which was just below that range. The index continued higher, moving into that range, but then moving above it to 2436.88. After a small pullback, the SPX moved higher into the close, topping out at 2449.71.

As I indicated yesterday, a move above 2409 wold invalidate the short term count I was following, and point to something else going on. So I have had to re-evaluate the wave count. Several days ago I had mentioned an alternate count in which the SPX was in the final wave of a sequence from 3393.52. That count is still in play, however there is not a clear 5 wave sequence from Wave E (2553.93) to the 2191.86 low.

The other possibility at the moment is to look at the move from Wave C (2710.89) to the 2191.86 low as a 5 wave sequence, making 2191.86 Wave D, and not 2367.04. There is a possible 5 wave count for that move. Wave E is then possibly on the way, with the SPX moving into a range that would complete that sequence today. Technically this also fits, with Waves A and C of the sequence touching overbought. Looking at 2553.93, or what I originally have labeled as Wave E, you will notice the RSI does not hit overbought. Today's move did bring the index up to that level. The upper bound for this count is 2503. This would be the highest point the SPX could reach and still satisfy my model.

So it looks like a move above 2503 makes 2191.86 the completion of a 5 wave sequence form 3393.52, and at least a short term bottom. Until that level is exceeded, another move lower is still possible.

Monday 03/23/2020

The SPX opened lower this morning, dropping to 2229.47 in the first 15 minutes before rallying to 2294.55. The rally was short lived, and the index soon rolled over, falling to the low of the day at 2191.86. From there the SPX ran up to 2300.73, fell back to 2198.98, and then moved slightly higher into the close.

The SPX has moved lower since last Thursday's wave c high of 2466.67. My last few posts have outlined my expectations from that point. First a move lower below 2280.52, followed by a move higher to complete the fifth wave from 2280.52. With today's move to 2191.86, the SPX looks to have completed a 5 wave sequence from 2466.67, the wave c high. I have labeled this on the 15 minute chart as 2466.97 - 2404.99 - 2453.01 - 2353.85 - 2404.30 - 2191.86. Now knowing the probably fourth point, a target range for wave e can be projected. To this point the move has been 2280.52 - 2431.03 - 2385.83 - 2466.97 - 2191.86. This would project a target of 2389 - 2409 for wave e.

So I am looking for a move higher to 2389-2409. A move above 2409 would likely invalidate this short term count. A move below 2191.86 before reaching my target level would mean wave d has not completed.

Market Meanderings 03/22/2020

On Thursday I noted a setup that I thought indicated the market would move lower. Overnight Thursday the futures were significantly higher, and that was looking unlikely. But at the market open, the SPX only moved slightly higher, to 2443.50. The index then sold of to 2378.08, before moving to the high of he day at 2453.01. From there the index moved steadily lower, with only a couple of failed rally attempts, finally closing near the low of the day of 2295.56.

I will discuss in more detail what I saw on Thursday, but thought a short discussion of my methods might be useful before I do that. My model is based on one relationship, and seems embarrassingly simple. Each wave breaks down into 5 smaller waves, and those smaller waves, when taken as points, exceed a certain correlation threshold, which is an R^2 value above .99. In the history of my posts, I have noted many, many waves, and each wave adheres to this rule. So the model is not complicated. The complication comes in correctly discerning the waves. So since stumbling across that relationship, I have tried glean what I could from others about correctly identifying waves.

Some waves are fairly straight forward, and are easy enough to follow. But waves can be infinitely complicated, as each can further break down into additional 5 wave sequences. The complicated the wave, the more difficult it can be to follow. it. As an example, I will look at the long term SPX chart.

Looking at the chart, Wave I began at 666.79, and ended at 1219.80. Taken as a point, it would be (666.79, 1219.80). Wave II would be (1810.10, 2872.87), and Wave III (2346.58, 3393.52). The R^2 value of the three points is .9925. So that would meet the requirements for completing a 5 wave sequence. And I guess the obvious question is how many false signals given? The answer is very few. Once the first and third waves are identified, a range for completing wave 5 can be given. If it turns out to not be wave 5, the wave will terminate either above or below that range. That is my model in a nutshell.

When I give targets, or what I have been calling primary targets, they are based on the range where wave 5 would complete to satisfy my model. At times I will mention secondary targets. While the above rule is absolute, and is true for every wave, I have always tried to find additional relationships. The holy grail of my model would be able to project each wave based on prior waves. So I have notice some other relationships that may usually work, but are not universal. So I try to distinguish between the two by using "primary" and "secondary" target labels. An example of this would be my 2030 secondary target for the completion of the wave down from 3393.52.

What I noticed was that the corrective wave generally completes based on previous points. If you take (Start of wave, End of correction), (End of correction, Wave III), and (Wave III, Wave V), again the correlation comes in above .99. So for this example, (666.79, Corrective Wave), (Corrective Wave, 2872.87), (2872.87, 3393.52). Now you can compute where the correlation is 1.00, and a likely target. For this example, the target is 2030. Sometimes the range can be large, but this method usually comes close. Should that target be broken, the next target would be computed by using the next lower high of the previous wave, or 2116.48.

All of what I do here is based on correlation of points. Some are experimental in a sense, so I want to make a clear distinction between those and hard Wave 5 targets. But I decided to discuss some of this to show that there is some method to the seeming madness, and not just numbers I pick out of thin air.

Which brings us back to Thursday. Given the previous wave set up, I think I mentioned Wednesday's 2280.52 low as a possible Wave 3. The implication being there wold be a move higher, followed by one more move lower to complete a 5 wave sequence from 3393.52. On Thursday we did get a move higher, with he SPX reaching 2466.97.

I consider waves to be fluid, reflecting the sum knowledge of investors, or speculators. So my labels are based on the most probable outcome given the wave structure. My view is that a change in structure reflects a change in sum knowledge. As long as the points themselves are not changed, adjustments to the count can occur up until a 5 wave sequence completes. So when I looked Thursday's action, I saw this:

Although the SPX moved higher through the day, it never seemed to have a lot of conviction. If the 2280.52 low was Wave 3, Wave 4 higher should have completed in a 5 wave sequence to the upside. When I looked at it more closely, I saw the first three moves higher as 2280.52 - 2359.75 - 2305.91 - 2409.81 - 2319.78 - 2431.03. (2280.52, 2359.75), (2305.91, 2409.81), (2319.78, 2431.03) has an R^2 value of .9962, and indicates a 5 wave sequence ended at 2431.03. The move from 2431.03 to 2385.83, when looked at on a smaller time scale, also breaks down into a 5 wave sequence. Then the move from 2385.83 to 2466.97 breaks down as (2385.83, 2432.27), (2408.31, 2456.50), (2421.08, 2466.97), which has an R^2 value of .9956, completing another 5 wave sequence. So the entire mve from 2280.52 to 2466.97 broke down into 3 waves, and not the expected 5. This implies that this move was part of a corrective wave that would mean a move lower below 2280.52. Then the corrective wave would complete with a move higher. Since we know the first and third waves, once we see the low (Wave d), we will be able to calculate the Wave e end point. That  would only be the second wave 2553.93, meaning 3 more waves down to complete that sequence. And since that would be the third wave down from 3393.52, it implies still another wave down after that.

So with the wave structure as it is indicates some work to the downside still needs to be done before any rally would occur. But I'll take a closer look at that once we see how the current sequence plays out.

And most importantly, everyone stay safe and well.