Few More Squiggles - Market Analysis for Jun 6th, 2024

The market has made it abundantly clear that the 3-wave pullback seen last week was a 4^th wave, which now makes the current rally a 5^th wave.  However, the initial move off last Friday’s low was a relatively clear 3-wave structure.   Therefore, it has left us with the conclusion that a 5^th wave rally off Friday’s low will likely take shape as an ending diagonal.

As we know, a 3^rd wave in an ending diagonal typically targets the 1.236-.1382 extensions of the first two waves.  And, that region is noted on the 5-minute SPX chart with a blue box.   Thus far, we have come up short.   But, we may make an attempt to get there into tomorrow.

Thereafter, I would reasonably expect a 4^th wave pullback.  And, it is quite common to see overlap in waves 4 and 1 within a diagonal.  Therefore, I would assume we can drop back down towards the 5300SPX region for that 4^th wave pullback.  That should set up one more rally pointing us to the bigger target box overhead on the right side of the 5-minute SPX chart for wave [5].  And, this should finally complete this rally and provide us with a 5-wave turn to the downside.

These are my general expectations over the coming week or two.  Yet, until we see a clear 5-wave decline, I am still strongly urging you to not get terribly aggressive on the short side.   But, I will also note that once we complete this smaller degree 5-wave structure off Friday’s low, I believe we will have a VERY full wave count to the upside.  Yet, I still am seeking confirmation.