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.
