Something Is Still Missing

It does seem as though wave (iv) has completed, and we had the expected overlap into wave (i) that is normally seen during diagonals.  Since that time, I am viewing the rally today as the a-wave of wave (v).

Therefore, we are still missing the b-wave pullback, followed by the c-wave of wave (v).  Again, remember that all the substructures within diagonals break down as 3-waves each, counted as a-b-c.

So, my expectation is that we will soon begin a b-wave pullback, followed by a c-wave rally.  While it is possible we can go directly to the target, I don’t see that as likely at this time as I do not see a clearly visible b-wave within this rally in the futures.  Therefore, I am going to reasonably expect a b-wave pullback.

The ideal target for the c-wave rally is the 7353SPX region, which is the 3.00 extension of waves i-ii within this rally, which overlaps with the 1.764 extension of waves (i)(ii) within wave v, which is the typical target for a 5^th wave in an ending diagonal.

Also, remember that the hallmark of an ending diagonal is that it usually spikes to completion (to the upside in our case), followed by an event stronger reversal, with an initial target of the region from which the diagonal began, which is the 7040-7100SPX region.  That move will either begin the blue wave 2, or the larger degree red a-wave.  

It will be at this point we will begin tracking the differences between these two paths, and we will have to watch very carefully to see if an impulsive rally begins at any point, which would signal that the blue count is taking hold, and likely taking us into the end of the year for the blue c-wave rally.  This process was discussed in the weekend update from two weeks ago, which was also linked in the past weekend update.