On the wave counting front, due to overlaps, this upward wave in the S&P500 - if it is still a minute (b) wave can be counted like this.
|S&P500 Index Daily - Possible Count for Minute (b)|
As a reminder, we have three waves down to wave (a), and wave minute (b) has not yet attained the 138.2 x (a) level. For the most part the upward waves are both overlapping and in a channel. And each wave has a "three-wave" look to it. At least, so far.
As we said earlier, neither the DJIA, nor the transports have made even a new all-time high yet, although we suppose they would. Based on a short term intraday chart, the S&P500, and the Dow appear to have unfinished waves at the top, as yet. We'll be watching for that over the next couple of days.
Today was the first day of the month. We said to be on the watch for the inflows from pension funds, 401k's, company bonuses, etc., and they are likely, in part, what fueled the market today. We also said we wanted to see lower lows rather than higher highs before proclaiming the (b) wave over. We thought it was possible the fund flows were weaker in the summer. That did not happen today, but we were were prepared for it. (While some 'first of the month days' have been 35+ points, this one was weaker - only 19 points.) Yesterday's diagonal was simply an ending one in the downward direction (actually probably just a widening triple zigzag which has exactly the same structure), and not a leading one.
And we suggested, yesterday's downward wave could be a .b wave, as we have marked above.
If the minute (b) wave finishes properly, then the next expectation would be for a large (c) wave down of an expanded flat for Minor 4. If, on the other hand, price prints full candles above the rising channel shown, it would mean something different.
Well, now what for the rest of June? Certainly, a valid question. There are elections upcoming in Europe, and a Federal Reserve rate decision, too. At present, funds and certain classes of investors are buying without abandon in the absence of any return from rates of interest. All of this while price diverges from the indicator. So be it. Let's hope that they don't abandon the return of their principal in the upcoming weeks.
If you are interested in why we think the wave up 'might' not yet be finished, below, in the top panel is a 15-minute chart of the DJIA. (We were comparing it to the S&P500 in the bottom panel).
|DJIA vs SP500 15 Minute Chart|
Since price has not yet tried to attack the lower channel boundary, we think a wave 4 could move price lower to do that, and then make a wave 5, up. Also, in relationship to wave 2, wave 4 at this location would currently be shorter in time than wave 2. That is possible, but not the usual set of circumstances. Further, in real time, after price made the three-wave a wave down from wave 3, we said new highs in a potential b wave up could be made to make a FLAT or triangle wave 4 to provide alternation with the likely sharp wave 2. It did! By crossing over the top, the Dow and the S&P have certainly activated and met the 90% requirement for the potential b wave of a flat wave. Rules are rules!
Cheers and have a good night!