Just adding a thought to the post from earlier: in trying to determine a target for this advance, we may also interpret this structure on $ES as an inverse, which yields us the measured move noted here:
I have been patiently (ha) waiting for a third wave pump to come along on $ES, and this rally is an excellent candidate for just that. Crucially, we have broken the down trend with conviction. Now, hmm, what to do. There are a couple of problems: if that is a green 2 down there, then we’re in a green 3, and surprises are to the upside in threes. Also, with all this coiling we’ve had, I may even not have enough ones and twos to compensate for it all. For instance, I have my subminuette (red) two down there as a flat, but for all we know, that flat is itself another nested 1-2.
I labelled it the way I have in an effort to be a little conservative. The best I can do for the moment is to pick the best looking 1-2 in there and post the expected extension target for that, and then place all the other numbers around it. The best looking nest in there is the micro (purple) one. So, I’ve posted a box here where we would expect that wave 3 to stop (and ideally at the top of that box).
At any rate, what we would like to see from here is further extension, followed by small corrections and smaller rallies as we go, a long series of fours and fives until the nests all complete. This process could take a couple of weeks: that “yawning arc” I’ve mentioned before.
Just keep in mind: I’ve placed these in a reasonable trajectory, but coming out of a low like this, there’s not a lot stopping the market from becoming unreasonable. You guys will notice that I often have to scoot my projections to the right, as the market can proceed more slowly than I expect, but on occasion, I sometimes have to scoot target boxes and wave labels to the left.
No changes to my general interpretation on $ES. I am counting everything as a 1-2-1-2-1-2 of minuette, micro and now submicro degrees. I continue to wait for the markup.
Micro (purple) and submicro (light blue) “ones” both look like excellent impulse waves to me. We should get going soon. Any serious weakness from this point will cause me to reconsider bearish counts, but until then, we continue to have an excellent setup for the upside. Just waiting on them to actually mark things up.
I am not suggesting one not stay hedged in some way, but we seem to have breakout support, so if it’s a nested 1-2-1-2 (orange and red), here is a target range we may expect on $SPY. This is roughly in line with my previously discussed thoughts on $ES, which may be found here.
The $DAX has entered a retracement zone consistent with a correction of some degree (I have labelled it as an intermediate 2, but that remains to be seen).
In any case, I see a seven-swing overlapping structure from the highs, which is consistent with a correction. It has kissed the 23.6% retracement of the prior advance and is diverging. At a minimum, we may expect a rally from here heading to the orange box above.
So long as this doesn’t break down, this nascent pattern on $ES is a constructive pattern of consolidation after Friday’s big run. I suspect it will break up.