As expected the Dow continued to roar ahead and the last week turned out to be an impressive one. Having met our target of 1500-1505 in the SPX, we had advised our viewers to take profits. We feel that the market has gotten ahead of itself, and for over 100 points in the spx, we have not seen a meaningful correction.Keeping that in mind, we feel that if the correction takes place, the support levels in the SPX that we should watch for are 1475 and if that is broken, we have major support in the 1455-60 area.Looking at the wave structure we feel that we have completed or about to complete the minor wave 3 of this advance and after a fifth wave of this advance which is underway could make a nominal high. The market has to potential to take this advance to 1515-1525 area, and this could happen as soon as the coming week.Long term our target for this bull market remains at 1775 to 1803 in the SPX. After the profit taking we will see an explosive advance in Dow and we hope to get our viewers on board for this advance.Currently we count Minor wave 3 having completed four Minute waves: 1468-1452-1502-1491 with Minute v underway. Since Minute iii did end at the OEW 1499 pivot, and Minute waves i and iii were 70 points and 50 points, respectively. We see no reason not to expect Minute v/Minor 3 to hit our OEW 1523 pivot target. After that Minor 4 could pullback as much as 40 points. Then Minor wave 5 should rally to the OEW 1552 pivot to complete the uptrend. Best to your trading!
Author Name: Zafar Sheikh