The Train Left The Station

With the gap up and continuation rally in wave (3), the market is getting quite close to the point it “should” finally see a larger degree pullback.

As you can see on the 5 minute ES chart, I am expecting one more (4)(5) to complete this current rally.  Of course, as noted during the day, I can be off by one degree, and the market may give us two more 4^th and 5^th waves before we complete this wave (iii) on the daily chart.

As you also may remember, our long term target for this wave (iii) resides between 2410-2440SPX, and the current structure seems to point to at least that 2410SPX region.  But, I will warn you again that, based upon the theory of alternation, I would expect a very strong reversal and decline for wave (iv), since wave (ii) was a long side-ways grind. 

For now, I still think it may take several days until we finish the micro structure into the 5^th wave of wave (iii), but now is a good time to look over your portfolio and determine what positions you want to hold through a 4^th wave pullback.