Market Still Grinding Higher As The Pattern Fills Out
By
Today we saw both the SPX and the Nasdaq grind back to new highs on what counts best as an extension of the wave (c) of the larger wave b. Bigger picture nothing significant has changed on the charts or counts as we push to new highs I will note that this push to new highs has allowed the count to reset which will allow for a new and potentially cleaner five-wave start to the next leg down. Before that occurs however this action is suggestive that we still have a bit more work to do to the upside before a larger degree top is seen as the pattern is now incomplete at these levels.
Drilling down to the five-minute chart this move up over the May high has made it likely that we are following the final wave v of (c) of b up to new highs. Under that case, we likely are still in the wave (3) of that wave v still needing another wave (4) and (5) to finish off the pattern.
The bigger question I have at the moment in regards to this move off of the 5/31 low is whether this entire wave v is an ending diagonal. As long as we remain over the 5317 level then I can give the benefit of the doubt that this is following an impulsive path higher under which case we could target as high as the 5447- 5512 zone to finish off the pattern. If however we break under the 5315 level and then make another higher high this would count better as an ending diagonal. Under the latter case, we would expect to see a fairly sharp reversal back down towards the 5193 level to start the larger degree move down.
In either case, we still likely have some work to do before a top is seen however and as long as this remains over the 5273 level under both cases we still should see at least one more wave (4) down and (5) up before this sees the larger degree top. The pattern does however remain quite full in this region and I still remain quite cautious as the market completes the larger degree topping pattern.
