The TRIN closed at 0.65 yesterday. That is not a resounding indication of a top, but it is low enough to serve as one. The S&P 500 closed at 1514.14. This places the broad market index squarely within the 1513- 1515 area of resistance that we have discussed previously. Furthermore, we have seen a three-wave formation up from the low of 1491.42 on May 10. All of these suggest that there is a good probability that the markets will give us that c-wave down to complete wave 4 of the rally up from May 14. This would simply give us a flat corrective formation prior to our rally to form Wave 5.
My primary target has been 1475.11. I still like that number for a few different reason, but the flat nature of this correct wave suggests that we should also consider the area around 1489.90 as likely target. I think that both of these numbers represent legitimate targets. Of course, we need to break below support at 1499.01 first.
To the upside, my primary target is 1522. I do not think I have discussed that frequently enough here. Nevertheless, there are a couple of sound methodologies that point to this number. I hope to discuss them further in the days to come.
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