Rally Resumption

Today shortly after the FOMC statement, the market nearly reached a new all-time high.  This is the expectation of the option in color, but the next best option that calls for a 5-wave advance higher since (A) has weakened (find out how it is determined that these are the two best counts since 2011 here).  This is because there is now a low chance of an impulse higher since (A) underway.  The momentum of A of (B) is so strong and the ensuing retracement so shallow that strength picking up, as is very typical for 3rd waves of impulse waves higher, is questionable.  An ending diagonal is more likely since (A), but this is not a common pattern.

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Flag or Impulse?

The long-term analysis found in this update is still accurate; with the best options by a good margin being a 5-wave move higher since (A) and a sideways correction since [3], the impulse rally since [2] is likely at or near its end.

From 2009, a zigzag or double zigzag is still possible, but not favored.  The reason is that there is little symmetry between the 'a' and 'c' or 'w' and 'y' movements and price is well above the 2000 and 2007 highs.  A sideways correction from one of those highs would make more sense if there was a tighter range, not a huge breakout higher.  From [IV] an ending diagonal with 1st wave underway or just complete is possible, but this is a rare pattern and contains the problems with the zigzag-family structure just mentioned.

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Consolidation Complete?

Still Using the analysis since the 2011 low in this update, the most likely options to look for in the long-term are a 5-wave advance higher since (A) to complete a 5th wave of some degree or a sideways correction underway since [3].  The structure of the former option is problematic in the wave 5 region as an impulse from 4 to [iii] is required.  The latter option has no structural problems, but the size of the wave [4] correction is small and should expand in price territory so it can be paired with [2] as a 4th wave. These two possibilities stand apart from the remaining ways of describing an impulse higher since [2] by a wide margin.

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