This would be an ending-diagonal ending with a final move towards SPX 2000 into the 7/16 major Bradley turn. It would first get a bit more downside from tomorrow's FOMC than I think most are expecting. That lower trendline needs to hold for a final move up.
Note also that the first move at the top may bounce off the 200 DMA. We need to do that before we go any further. GLTA ...
It seems like I'm the only one out here in the wilderness counting a nice 5-wave impulse off the 1955 highs -- everyone else is calling a correction. The move still needs a 5th, and an ideal target for that would be SPX 1916 late in tomorrow's session.
This would mean that Friday's pop was a wave 4 -- which in my mind needed to be sharp and deep in order to give us an unbroken 2-4 trendline in the series. That's a very important rule for me for determining the proper bounds of a wave 3 and the rest of the mess.
If the 1737 level is point "10" on this count, then that's where the pattern will take us. That agrees with the larger 3PDH count, the mega one since the 2010 lows, where 1737 SPX is point 22.
SPX 06-05 4Y with 3DPH
I added a high level Elliott count back to the larger chart. The volatility in 2011 is counted as a B-wave triangle, with the impulsive "C" wave starting at SPX 1202.
The count gives us a napkin target of 1957 on the SPX, by about next Tuesday.
I would caution against expecting a huge reaction and drop right off the top. These Three Peaks patterns show tops as an up and down thrust, surrounded by sideways movement. That sideways movement is what I think we had this week, waiting for the ECB's policy announcement.
So I would expect us to retreat from the ~1957 level, back to 1918 or so, bottom on the June Full Moon, and then hold there, sideways and slightly up, while the market waits patiently for June FOMC.
June FOMC gives us the next leg down to support at 1847-50, which sets up a larger head and shoulders that targets the July lows. We stair-step down into the Fall with sell-offs of increasing severity, until we are back to 1074 or so SPX.