Thursday's Market Action

The SP500 gaped up at the opening today, fell back a little, then climbed to around 1156.  Currently it is up around 27 points from yesterday's close.  Nice recovery?  All of today's action so far has been contained within the range of yesterday's action.   In fact, it's all been contained within the last hour and 17 minutes of yesterday's action.  Note that yesterday's action was all contained within the last hour and 17 minutes of the previous day's action.  This is easy to see on the current five day chart at Yahoo.

Despite the big percentage changes, this is a market going nowhere, and it's been going nowhere since Monday's bottom at the  closing bell. Sideways action is counter-current, and the current is down. 

The sub-wave 4 top might be in, but that is no sure thing. A retracement all the way up to  about 1258 is possible, though I would be surprised by that kind of strength.  More to come.

Update: At 1:00 pm the index is bumping up against yesterday's post-opening high of 1160 and seems to have hit resistance - a band from about 1160 to 1170 going back to Monday morning.  Up or down from here to closing?  I'm not taking either side of that bet.

Closing Bell Update:  A strong finish allowed the index to punch through the resistance band (that I might have imagined) to a high of 1186.29, before slipping back to 1172.62 at the bell.  Bursting through the two day trading limits has taken us all the way to -- Tuesday.  What I said then was: "Let's say it tops early tomorrow  at 1180, a retracement of about 79 points.  Subwave 1 down was only 64 points.  If subwave 5 is 1.62*subwave 1, then it would cover 104 points, and wave three would bottom at 1078."   

Not much to add at this point - except that subwave 2 was a pretty direct A-B-C. between 7/18 and 7/22.  We can expect subwave 4 to be a more complex and possibly longer formation.

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