It's quite clear by now that the market bottomed for Large Wave 4 on November 5th and that we have started Large Wave 5 up now. Currently we are in Medium Wave 1 up, inside that final 5th wave, and since the projected target high for Large Wave 5 up is the FP on the SPY of 787.13, and the time period for it to hit is the first week of January, we have a lot of time left for all the other Medium Waves to unfold. In the old days the market would tend to bottom around the second Thursday or Friday of any given month so that they could rally up into OPEX the following week to make all those "puts" expire worthless.
That pattern still exists but it's not as powerful these days because of the weekly and daily options, which weren't around back in the day. However, the monthly OPEX on the third Friday of every month still hold weight, just not as much.
With the market rallying into the second Thursday/Friday of the month, instead of bottoming, the next logical move will be a pullback early next week to start Medium Wave 2 down. It should subdivide into an ABC and most likely we'll see the Small Wave A down the first 2-3 days of the week, and then a Small Wave B up into next Friday for OPEX.
Below is a chart I posted on X on Wednesday...
After that I think we'll see a Small Wave C down the following week with the ideal low around the 24th, and that will complete Medium Wave 2 down. Following that will be the start of Medium Wave 3 up and it can last into the cycle high window of December 1st-5th, or extend into the 11th-15th, where the next cycle high is expected. If we top at the first high zone then the move up into second high would be a lower one, and would be called Small Wave B inside Medium Wave 4 down.
But if we make a higher high then it will be Small Wave 5 up to complete Medium Wave 3 up. Either way, there should be a pullback afterwards for Medium Wave 4 down that should bottom into the 17th-22nd zone of December. That will be the week after OPEX for that month and right before Christmas. It's a common pattern for there to be a pullback after any month OPEX when the market is going into it with a high, and that should be the case again next month.
Lastly we should see the Santa Rally start for the final Medium Wave 5 up inside Large Wave 5 up, and that's the one that should hit the 787.13 FP on the SPY to finish the entire pattern. After that we should see a nasty January where the lower FP's of 7063 ES and 692 SPY should be the target lows. We'll cover that more once we get there, but for now the short term tells me that Medium Wave 1 up is completing soon (or already complete?) and Medium Wave 2 down should start next week. Typical targets would be a 50%-61.8% pullback of the move up from the low, so the mid 7400 zone should be the low area once finished.
Have a great weekend.
