The SPX closed almost unchanged. For many days the Dow and the S&P have been rallying and having reached an extremely overbought level, the market went into profit taking mode and investors decided to cash in on gains that they had been accumulating over many weeks.This isMIA KULPA's view that having reached its target that we had for the minute iii wave in the Elliot wave structure, our investors should be extremely cautious and if they have not taken profits already should lock in profits. They should sit on the sidelines till the market again tips its hand.We are not expecting a serious sell off, but not of a major degree, though there is a slight potential for the market to hit 1450 level as that is a major support area. There is a strong possibility that this minute wave iii of 5 has ended, and we should pull back in a very subdued manner to 1480-85 area in the SPX. Though as stated earlier there is a possibility that we could go down further and hit 1460 and lower in the SPX. Our target for this move stays as stated earlier, which is anywhere from 1520-1550 SPX area in the next three to four weeks. But watch out for our prior upside resistance which is again at 1500-1505 area.
Author Name : Zafar Sheikh