Back in mid-July, we called for the market to top within 3 weeks
between 2487-2500. And, 3 weeks later, the market topped at 2490SPX
within one day of the topping date we expected. And, since we struck
that high, the market has followed through in an almost textbook fashion
for the entire month of August, as we caught just about every twist and
turn during the month.
However, we were expecting the market to provide us with a larger
degree pullback off the August high. Yet, all we have seen thus far is a
smaller degree pullback from 2490 to 2417. In fact, coming into this
past week, the market was set up for a drop down to the 2400SPX region.
And, while it did initially follow through to the downside at the start of the week with a strong break of our cited support, when it came back up through 2460SPX, it gave us an initial indication that the market may not be ready to continue down to the 2400SPX region just yet. The move back through 2460SPX suggested that the market may still try to make a higher high before the larger pullback takes hold in earnest into the fall.
Ultimately, the lack of downside follow-through this past week created a much more complex market environment over the coming month. And, while we are prepared for the drop seen at the start of this past week, it also provided us with early warning that the immediate downside pattern may fail, well before we moved back up to the region from which we began last week’s drop.
In fact, the move back up over 2460SPX this past week opened the door to the potential that the market may attempt one more push towards to 2500-2510SPX before it finally moves down in earnest in the larger degree wave (4). And, as you can see on the 60-minute SPX chart, I have highlighted that potential in yellow.
As long as the market does not break down below 2455SPX, we have to recognize that this strong bull market may still make one more attempt to strike the 2500-2510SPX resistance region. But, a strong gap down on Monday below 2453SPX should place our initial target this week at the 2420SPX region, and strengthen the case that wa
ve (4) is still currently in progress.
While we have a methodology we use to guide us and provide a basis for our market expectations to a high degree of accuracy, there are times when the market does not provide us with near term clarity. And, going into this coming week, we cannot strongly claim that we “expect” the market to be down on Monday, even though the set-up is clearly evident on the chart.
While it is certainly my preference, and we have a clear set up to take us down on Monday towards 2420SPX next, I cannot say that the probabilities are high enough to state so confidently. And, should the market instead break out over 2470SPX resistance on Monday, it begins to open that door to the 2500SPX region before we head down again later in the fall. So, this weekend, all I am able to provide are guideposts, rather than a strong expectation as to how the market opens in the coming week.
In the bigger perspective, nothing has changed our analysis that the market is likely heading up to the 2600+ region. The only question we have is how we get there. Our preference is to still see the market drop down to the lower support region on our 60-minute chart before we begin that rally to 2600SPX.
And, while it did initially follow through to the downside at the start of the week with a strong break of our cited support, when it came back up through 2460SPX, it gave us an initial indication that the market may not be ready to continue down to the 2400SPX region just yet. The move back through 2460SPX suggested that the market may still try to make a higher high before the larger pullback takes hold in earnest into the fall.
Ultimately, the lack of downside follow-through this past week created a much more complex market environment over the coming month. And, while we are prepared for the drop seen at the start of this past week, it also provided us with early warning that the immediate downside pattern may fail, well before we moved back up to the region from which we began last week’s drop.
In fact, the move back up over 2460SPX this past week opened the door to the potential that the market may attempt one more push towards to 2500-2510SPX before it finally moves down in earnest in the larger degree wave (4). And, as you can see on the 60-minute SPX chart, I have highlighted that potential in yellow.
As long as the market does not break down below 2455SPX, we have to recognize that this strong bull market may still make one more attempt to strike the 2500-2510SPX resistance region. But, a strong gap down on Monday below 2453SPX should place our initial target this week at the 2420SPX region, and strengthen the case that wa
ve (4) is still currently in progress.
While we have a methodology we use to guide us and provide a basis for our market expectations to a high degree of accuracy, there are times when the market does not provide us with near term clarity. And, going into this coming week, we cannot strongly claim that we “expect” the market to be down on Monday, even though the set-up is clearly evident on the chart.
While it is certainly my preference, and we have a clear set up to take us down on Monday towards 2420SPX next, I cannot say that the probabilities are high enough to state so confidently. And, should the market instead break out over 2470SPX resistance on Monday, it begins to open that door to the 2500SPX region before we head down again later in the fall. So, this weekend, all I am able to provide are guideposts, rather than a strong expectation as to how the market opens in the coming week.
In the bigger perspective, nothing has changed our analysis that the market is likely heading up to the 2600+ region. The only question we have is how we get there. Our preference is to still see the market drop down to the lower support region on our 60-minute chart before we begin that rally to 2600SPX.
No comments:
Post a Comment