Pullback Next - Market Analysis for Aug 6th, 2024

It seems that the corrective rally outlined yesterday is likely underway.   So, let’s talk about the next expectations.

First, I want to note that the standard target for the [a] wave within a b-wave rally is the .382 retracement of the prior a-wave decline.  That is in the 5330SPX region, and noted on the 5-minute SPX chart.

At this time, it would seem that we may come up short of that target.   And, if we do, I have an alternative consideration on the chart.  That would suggest that this rally is actually a 4^th wave bounce in the [c] wave of the a-wave.  This means that we may still see another lower low before the a-wave is complete.

This now brings me to our second expectation.  I would be looking for a pullback to begin soon.  Should that pullback take shape in corrective fashion, then it is clearly the [b] wave of the b-wave pullback, which will then set us up for another rally to our target overhead for the [c] wave of the b-wave.

However, if the next drop begins with a 5-wave decline, then it opens the door to that lower low in the 5^th wave of the [c] wave of the a-wave, and only thereafter would we begin the b-wave corrective rally.

So, in summary, I am looking for a pullback to begin soon.  And, if that pullback is corrective, then it will be the [b] wave of the b-wave, then setting us up for another rally to our target box to complete the [c] wave of the b-wave.  However, if the decline begins in a 5-wave move, then it opens the door to a lower low before the a-wave decline is completed.