Here is the big picture from Elliott Wave prospective.
1. Bullish shorter term count completed on May 10th, 2006.
This count indicated that the DOW completed an ending diagonal in wave (5) to complete wave [b] that rallys from the Oct. 2002 low. The SPX and NAS also completed the ending diagonal patterns to complete wave [b] up as well. The SOX topped out at 550 target area, which coincided with reversals from the DOW, NAS and Nasdaq. This was a clean diagonal pattern in wave [b] up with a tight target area and is now complete.
2. The diagonal pattherns are complete and we have confirmed the completion of wave [b] with a impulsive move lower in 5 waves, to be followed by a 3 wave rally not to surpass the high as wave (2). further and steeper downside should follow in wave (3) down, which should be started in the first week of July, 2006, and lasted for at least 4 weeks which wave (1) had, and wave (4) rally will be the summer rally and will be started in 2nd week of August, 2006 and lasted till 1st weeks of Sept, 2006 just as wave (2) does, then wave (5) will bottomed the market in late Oct., 2006. Target for wave (I) is Nasdaq arount 1900, SPX around 1160, DOW around 9700.
3. Wave (II) rally will started from the wave (I) low in Oct, 2006 and lasted to May, 2007, and retrace 50% of the wave (I) down.
