We got the reversal this morning after futures were down big overnight with the cash indexes not following this morning. It looks like we will have another leg down to complete wave [c] unless the 5/19 high of 1346.82 is exceeded on this rally. If it is, then wave [d] up is probably underway.
There is a good chance that wave [d] is in fact underway as the decline from the 5/2 high has taken 17 trading days so far, which exactly matches wave [a]. Wave [b] lasted 32 trading days, almost 2 times wave [a]. If the usual relationships hold, then wave [d] will last either 11, 17, or 28 trading days, and wave [e] will take 7, 11, or 17 trading days. This puts the potential end dates for the correction at June 21, July 5, July 22 and August 1. June 21 or July 5 appear to be the most probable.
One reason to be encouraged is that leading stocks continue to break out. NFLX is a good example. I am long from 250. Also, the previous swing lows have yet to be broken. The next few weeks are likely to feel dull and unproductive, but remember the old adage to never short a dull market.
Oil likely completed wave c up of a bearish [b] wave triangle today or will do so tomorrow. After the sharp drop from 5/2 to 5/6, we should expect another round of selling to complete the correction in oil. On the other hand, if the triangle breaks out to the upside, it would probably be more bearish for oil in the long run.
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