Is The b-Wave Pullback Complete?

The market rally thus far today counts well as a corrective a-b-c structure, which would suggest that we can see another leg lower in a (c) wave decline before this correction completes. If the (b) wave is complete, then we have an ideal target for the (c) wave which coincides with the .764 retracement around 7640ES, which also represents an (a)=(c) decline from the high we just struck.

Of course, there are a couple of other reasonable possibilities that I want you to keep in the back of your mind.

First, should the market rally higher towards the top of the box then we have a potential leading diagonal for wave 1 of the c-wave, and the b-wave could very well already be complete.

Second, the high we just struck may even be an a-wave in a more protracted a-b-c corrective structure, which means we would see a corrective pullback for the rest of the day rather than an impulsive decline begin the (c) wave lower.

So, for now, the main point is pressure will remain down for another decline unless we see a leading diagonal for wave 1 of the c-wave. But, if the pullback that is happening now around 2PM takes a lot longer, then it is likely a more protracted b-wave in a bigger (b) wave, as compared to a 4^th wave pullback in a leading diagonal for wave 1. The 4^th wave in the leading diagonal should take us higher before the end of the day if the diagonal is the market’s intention.