Even though the market moved lower Friday before rebounding, the (iv) wave correction suggested in Thursday's update still looks valid.
(iv) has now been labeled as a single zigzag. Note the broken guidelines within a of (iv), a move very similar to that seen April-May 2010 (wave A of (XX)). These two impulse waves are well suited as impulses within zigzags. Friday's action also gave a corrective look to the Wednesday-Thursday sell-off.
The market had a quick vertical drop near the end of the trading day but rebounded into the close at 4:00pm EST. At its close 15 minutes later, the e-mini actually closed at Wednesday's high. A "3rd of 3rd" gap higher Monday morning makes sense given the entire short term picture.
Prices are still moving higher but the market is basically trading sideways. The market may be "waiting" for the new year before beginning a more inspired move. It is interesting how the upward bias of the holiday period seems to work perfectly with the Elliott count. The same was true last year.
No matter how you picture it, the rally since late August is running out of steam quickly. Using the same time forecast from last week, the rally should complete early this week. If the count is correct and v of (v) will not be an ending diagonal, my guess is a top Tuesday in the upper 1260s. Higher prices are very possible.
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