Here are two charts, one showing more detailed wave counts and how this rally is expected to play out...The second chart shows this in the greater scheme of things.
Looks like we have had the 5 waves off the top to complete the BIG CIRCLED 1....So this rally is corrective.Corrective Rallies usually have 3 wave structures labeled A-B-C.If internal structure of A is 5 waves... we can expect a "zig zag" pattern (feel free to google "elliott wave zig zag")There seems to be a rather clear 5 waves in the A, so I expect a Zig Zag to further highs.
The bigger picture shows the potential for a big "Head & Shoulders" pattern.If we see this "Zig Zag" that is expected...The bigger picture will look like the chart above.Also we would need a move higher to look like a reasonable "retest" of the previous major trendline (has had 5 touches and kept the market up since July 2008).Thirdly, The "Box" between 5375-5400 should be treated like a "GAP".... this is because we had a fierce sell off here, and this area was NEVER touched again since the decline from 5600... you can see that it want straight through it and never looked back....The parameters of the Box also correspond to previous resistance lines on the potential "left shoulder"...so this area looks very significant.Time Span expectation for this Rally: 1-1.5 weeks.
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