As we predicted yesterday, there was a gap up at the opening today, with $SPX breaking out of the prior resistance of 1.530 observed on February 19 (now becomes support).

Furthermore, as we stated yesterday, on the hourly, $SPX reached the predicted 1,538 level (in fact reached the bit higher 1,543 level) and already began a small pullback towards the new support level of 1,527 - 1,530.

It is expected that subsequently $SPX will likely reach new highs at 1,565.

A close below the recent 1,512 on the $SPX  or  14,030 on the DOW will invalidate our scenario.

Next target: Test support

As we predicted last week on Monday (February 25, 2013), the bottom of the down trend was at 1,485 on the $SPX.

We also said that the new uptrend, the beginning of which was confirm last week Tuesday (February 26, 2013), would be composed of 3 legs:

(1) up 35-40 points: 1,525 : wave i
(2) a small pullback 1,501: wave ii
(3) a second 35 or so point advance : wave iii.

Within this wave iii, we see on the hourly the first leg up to 1,520, a leg down to 1,512 and now underway a second leg up to a target of 1,538, which will clear the recent resistance of Feb 19. It will then pull back to the new support (previously resistance) of 1,527 - 1,530, and possibly reach new highs targeted at 1,565.

A close below the recent 1,512 on the $SPX  or  14,030 on the DOW will invalidate our scenario.

Next target: 1,538.

The first 35-40 point leg up was completed to day at 1,525 on the $SPX (wave i of wave V of wave 5).

We expect to see a pull back now (wave ii of wave V of wave 5), followed by another leg up (wave iii of wave V of wave 5), targeting 1,560's on the $SPX.

Similar observations on the DOW as well (14,149), whereby following a short pullback, the index will climb to 14,450's.

Again, a close below this week's low of 1,485 on the $SPX will invalidate our projections.

We accurately called the bottom of the down trend last Monday and the turn up of the markets on Tuesday.

This uptrend will be composed of first of 3 legs, (1) up 35 points on the $SPX, (2) a small pullback, (3)  followed by second 35 point advance.

Then, we will have another potentially larger pullback, followed possibly by a 70 point or so advance that will end this bull market that started in March 2009.

Our final target is 1,618-1,634 range on the $SPX, or 14,788-14,920 on the DOW.

Today's price action signaled the start of a new leg up, which will last a few weeks and reach a target range of 1,618 - 1635, with 1,626 as most probable on $SPX, and 14,788 - 14,920 on the DOW, with 14,856 as most probable.

A closing below today's low invalidates our projections.

Clearly, the stockmarket has been on a down-trend (wave-4, within the current WAVE-5 that started Dec 31, 2012). Our projections account for wave-1 of WAVE-5 from Dec 31 -to- Jan 4, wave-2   completed on Jan 8 and since then we have enjoyed wave-3 within this WAVE-5 until Feb 19.

The projected target on the $SPX for this leg is 1487.91, which was met today. The length of the downtrend is expected to be 4-6 days. Therefore, it is possible that the down trend ended at the closing today. The last support for this down trend is 1451; a close below this level signals a major decline (not the assumed wave 4).

After that, the index will resume its course to a new high, with a tentative target of 14,788 on the DOW and/or 1,634 on $SPX (the actual targets will be defined better after the downtrend is completed).

As previously noted (one month ago), the Dow Jones Industrial average reached the 14,000 level as predicted.

The next move is down, for about 300 points, to the support level of 13,860.

On the Elliot Wave count, Wave 3 of a larger Wave V that started on Nov 31, 2012 has been completed. We are now in Wave 4 of this this larger Wave.

The target for Wave 5 of the larger Wave 5 is just above the 14,800 level.