Tuesday, September 29, 2015

What is today's bounce from 1876?

As SPX fell slightly below its 5th wave down from 1953 yesterday, I conjectured that SPX might be forming 9 waves down and/or an EDT 5th. The latter seems to have been the case albeit an expanding diagonal and not as close to 1867 as I expected.

If my overall SPX count is correct 2135-->1867=W, 1867-->2021=X, 2021-->1700ish=Y, then we are likely still in wave AofY. Today's bounce is likely wave 4ofAofY. If so, wave 2 was a weak 38% Fib and wave 4 is likely to be a weak 23-38% Fib targeting 1876-->1894-to-1906. The rally thus far has reached 1899.

If SPX exceeds the bottom of my wave 1ofA at 1909, then we must consider that SPX is either in a 1-2-1-2 in which case 1910-1930 becomes a possibility or that SPX is forming a more complex ABCxABC within Y in which case 2020-->1876 could be corrected even higher than 1930. And, we'd need to consider the possibility that Y was completed at 1876 in which case 2000+ is possible.

Of course, my target is SPX 1700ish in October for various technical reasons, so I believe AofY is not complete. If I am correct and 1899ish is the wave 4 top, then wave 1=112pts, wave 3=77pts and wave 5 would likely equal 47-77pts. SPX 1899-(47-77)=1822-1852. Interestingly, you may recall the last great Fib cluster support I calculated using key pivots over the last 15+ years was 1822-1851. Hmmm. Tony Caldaro has many pivots but 2 of them reside at 1828 and 1841 +/-7. Of course, if SPX rallies to 1900-1908, that range rises. Nonetheless, it looks like my original 1828 calculation may come into play but anything below 1853 is a potential wave A bottom.

In summary, if SPX does not exceed 1909 before breaking 1867 as I suspect, a likely wave A target is around 1828-1850. If SPX does exceed 1909 before breaking 1867, we'll need to evaluate the wave structure, momentum, volume and other indicators to determine if wave A is nesting for a more bearish outcome or if perhaps a different count is at play. Good fortune.

P.S. Update Wed Sep 30 9AM EST
It appears SPX will break 1899 at the open and potentially test 1909. SPX could have completed a 5-wave structure down from 1953 and possibly even 2021 although the latter is less likely given both time and price. Whether or not SPX 1909 is surpassed, the Dow certainly looks like a slightly different count than SPX or NYSE or Nasdaq. What would bring them in sync is if the rally today/Monday is part of a 1-2-1-2 from SPX 2021/ Dow 10362. That would mean a wave 3 is imminent, although SPX would likely overlap 1909 to 1910-1930 first. That would also mean no low until next week and that would merely be AofY in my count. Let's see how far the current rally goes. Good fortune.

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