The general tendency after a Friday selloff prior to a Monday holiday is an up day on Tuesday about 70% of the time. The first day of June is positive about 80% of the time. Together this means the probability of an up day on Tuesday, June 1, is about 94%.
Without respect to elliott wave analysis, overall the current market behavior resembles that of the summer of 2007 which had selloffs in February/March and July/August. This year we have had selloffs in January/February and April/May. Then, the SP500 exceeded the July high before the advent of the most recent bear market. I think we will see something similar this time around but without the same bear market, just yet. If you take a look at a weekly candle chart of the SP500 you will see the similarities in behavior.
In order for the pattern to hold, we need to see an up week for the first week of June followed by a couple of weeks of consolidation and then a multi-week run to retest the April highs. Let's see how the shortened week plays out.
Happy Memorial Day!
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