A New Round of Buying

The wave higher that we have been tracking since the 2009 low can be an impulse or zigzag wave.  Beginning at one of the late 2011 lows, an impulse wave higher began and is currently winding down.  An ending diagonal higher that began in 2013 or 2014 at [4], B, or (2) remain good possibilities.  A sideways wave since (1) in 2014 is also still worth considering.

Action higher this year is very choppy and full of zigzags, so it is unlikely that the market is drawing out an impulse wave higher since (2) or [4].  A sideways wave from (3) is possible, but it is then an 'x' wave of a double zigzag since (2).  This is a then a very complex move that has either a proportionality problem with the larger structure (if there is a sideways wave since (1)) or will cause loss of wedging higher and loss of ending diagonal possibilities (The lower red line is very close to current action and it almost certainly will be breached if there is a sideways wave since (3).  In addition, sideways 2nd and 4th waves of ending diagonal are extremely rare).

The low-probability burst higher to a near all-time high causes a significant change to the possibilities by moving options that were previously not strong to the forefront.  While an incomplete sideways wave since A remains weak, a complete zigzag+flat corrective wave in the B position is now a good option.  One reason for this is due to the fact that a zigzag from (4) to (b) of [y] now requires a more complex double zigzag higher beginning at (4).  Still, the superior alignment of the structure of the waves with this wave count for a zigzag higher from (4) to (b) keeps it in good standing.  A double zigzag from (4) works much better with a sideways wave since the last all-time high at (b) for 'x' (so 'x' is of better size relative to triangle 'b' of 'w'), so a retracement back to the 1860s, maybe a bit more, is worth considering.

(c) of [y] can be seen as a double zigzag, albeit not a great one.  There are no problems with a complete zigzag higher from B.  Actually it counts slightly better this way because of the deep retracement last week before the surge back to 1900.  Subdivision is a feature that only adds complexity to an impulse wave and one retracing more than about 61.8% is not that common in second waves.

The structure of the advance since B looks best as described above.  If the market begins correcting Tuesday when the market opens (there is the Memorial Day holiday on Monday), getting under 1892, a 4th wave of [iii] very near the core of [iii] and a support area, would be uncharacteristic of a 4th wave.  Since [ii] is so large, in order for [iv] to gain good proportionality with [ii] while obeying typical guidelines, the market will probably trade in a sideways range for a few days.

Conclusion:

In the short-term, a breakdown into the 1880s under [4] is a signal that ...

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