Trend is still up until daily close below 1,537 on $SPX

Price action today was a correction of approximately 78% of the move from Tuesday's low to Wednesday's high.

Our model indicates that if the trend is still up, we should see a higher high soon.

If we close below 1,537, our model suggests that the market is rolling over to the down side.

Confirmation of new uptrend

Today's price action suggests the start of a new uptrend, with a potential target of 1,610-1,620, or a bit higher, on the $SPX. 

This new uptrend was confirmed on the DOW (made a higher high), but not $SPX. This scenario reminds us the May 1, 2012 scenario, following which the market rolled-over lower.

A close below the recent low (1,537) will invalidate the above scenario and suggest that the market is rolling over to the down side.

One more leg up - maybe

As we stated yesterday in our afternoon posting, we expected to have a gap up followed by a sell off that would reach 1,537.34. 

Today's price action confirmed our prediction and reached as low as 1,538.57 on $SPX. 

Our model predicts one more leg up to 1,620's on the $SPX (see weekend graph).

A close below 1,537 invalidates our prediction and suggests that the market has rolled-over to the down-side.

First leg down

We accurately predicted a short-term top last Thursday and the beginning of a correction last Friday.

Today, we experienced the first leg down of an ABC correction to 1,545 along with a retracement to 1,558.

We expect a second leg down to approximately 1,537, even if we have a gap up at the open tomorrow.

Our computer model projection

Short term down trend began

We have been noting since February 28, when we predicted the start of the present wave, that it would end in the range of 1,560's (1,563) on the $SPX.

Yesterday we clearly called the short term top.

Today, the market started a downward correction.

Our computer model calls for 1,537.43 as the short -term target of this downtrend.

Short term uptrend target reached on $SPX

We clocked 1,563.23 at EOD today, which falls in our target range for this uptrend, as we have previously defined. Also, RSI on the daily and hourly was above 70 at closing.

The market can certainly extend higher, or could reverse lower heading lower.

For us, this leg has almost completed (and we are waiting for a pull back).