Rally And Consolidation Today

So, what does this rally and consolidation mean today?

Well, if the market has the intention of heading higher sooner rather than later, it can easily be counted as the [a][b] of the b-wave rally I have outlined on my 5-minute SPX chart.  And, since we are dealing with 3-wave structures, we have to keep in mind that another high could also just be a more extended [a] wave.  But, for now, I am just keeping that in the back of my mind.   Yet, keep in mind that corrective structures are the most difficult of the Elliott 5-wave configuration.

The main point I want to make in this update is that there is no evidence of a top having been struck yet, despite how extended this market has become in 2024.  In order for me to consider that red b-wave top being in place, I would have needed to see a 5-wave decline off that high.  Thus far, that seems unlikely.  Of course, the market may still attempt a lower low to the red wave i box below and trace out a possible leading diagonal.  But, again, I am not seeing that as the most likely path at this point in time.

Therefore, the next question we will address is whether the wave iv in yellow is complete.  And, as I noted over the weekend, it will be a game-time decision.  The reason is that the market will likely rally up to the resistance box noted on the 5-minute SPX chart.  And, the manner in which it pulls back off that resistance will tell us if we are in the yellow wave v or if the c-wave of wave iv is still going to play out.   If the pullback is corrective, then we are likely on our way to new highs for wave v.  If the pullback is clearly impulsive, then we will be heading down one more time to complete the c-wave of a more protracted yellow wave iv.

So, much will depend upon how the market pulls back from the resistance overhead once we strike it.