Yesterday we saw a bounce up from the low that could have be a wave 4 up of a C wave down. But this morning in the premarket action we see the market dropped again to 2705 for a higher low then Mondays low and has since recovered almost back to even as I write up this mornings update. I'd now call yesterdays rally up a A wave of some degree and the drop this morning a B wave, which leaves the sharp move back up to be a C wave.
So it now looks like Monday's noon time bounce was more then likely the wave 4 up of C down and then the rest of that day was the wave 5 down of C down. Meaning (or suggesting, as again I'm not an Elliottwave expert) that the June 13th high down to Monday's low was an ABC that likely ended on Monday. If this is correct then we are in for a multi-day rally that could even take us into all of next week?
It's too early to know for sure but when I look back at all the times we've had sharp drops (like on Monday) that surprised everyone (meaning very few were short the move) the market would go up from that low for quite a long time as every bear was then awake and needed to be put back to sleep before they could drop it hard again. When I look back at similar moves the April 25th low and rally into the 30th could be what we see happen here again this time? A similar move could take us up to the rising blue trendline just under 2760 right now.
It's probably not going to be some super strong rally but more of a slow grind as traders slowly start leaving early for the coming Fourth of July holiday next week (which should also be a super light volume period). So in my humble opinion the low is in for this week and possibly all of next week. Another move down still could happen but with the holidays coming up soon we might not see it until after that's over with? It really depends on how fast they move this market up I think as if they do it too fast the chart will get overbought and then I'd worry about another surprise drop around the holiday when everyone is gone.
It's possible that they pull another fast one on us sheep and drop it hard the day before or after July 4th, but again it's too early to speculate on that now. I'll only say that today looks bullish to me and tomorrow could be same. I don't see the current low from Monday being hit again this week and at least some of next week (if not all of it?).
