Saturday, 11/8/14 update

The ES/SPX has moved up impressively since the mid-October low.  Any number of technical measurements are showing an "overbought" situation, including Al's Daily indicator as can be seen below.  This rendering has the formula based off a 20 day time frame, as can be seen it's been a respectable identifier of market tops over the last couple of years (note that the price chart is the NYSE).

The EW pattern of the current rally was fairly straightforward through Oct 31st, but the last week of action has gotten a little muddy.  Thus there are a number of ways to label the short term count, below are the two most likely alternatives:

OR

There are a couple of things to note in these charts.  First, there are enough waves to count a close to complete or actually completed structure off the mid-October low.  Second, it's apparent that the rally has lost some steam over the last week - the rate of ascent is visibly weaker.  Of course, the market could just be basing for further sharp rally, but the odds are that a correction of some sort is more likely in the very near future.

From a longer term perspective the market is at a critical inflection point.

Major W1 (see legend on right) of the bull market that started in October, 2011 was a fast and furious run up that lasted 18 days and climbed 221 points. Major W5 since the recent mid-October lows has climbed 220.50 points in 17 trading days through Friday.  Major W5 = Major W1 at ES 2034.25.  Friday's high of 2033.50 is almost a direct hit of that target.  So if Major W5 is going to duplicate Major W1 then the top to Primary W III is very close if not already achieved.  However, Major W5 could very well extend, and thus a top here could well be only the high for Intermediate W1 of Major W5.  That would mean a lot more bull market yet to occur in the coming months.