TECHNICALS ARE GETTING EXTENDED

I maintain the two potential counts for the advance from the November lows:

• Option 1: Triple Zig Zag. If this is the case we need an 11 legged structure therefore there is a pending wave (B) pullback followed by the last wave (Z) up.

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• Option 2: Double Zig Zag: If this is the case we are in the last wave (Y), but due to its corrective look it should unfold an Ending Diagonal.

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Therefore regardless which count is correct the next pullback will be bought.

The short-term pattern (Up leg from the April 18 low) is not clear and there is no indication that it is over, but we have warnings that a multi-day pullback is due:

• Extreme bullish sentiment in the option camp (Equity Put/Call ratio very low).

• Daily Stochastic is overbought

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• Negative divergences of breadth indicators are becoming visible

Regarding the EW count of the current up leg (From the April 18 low) without much confidence on a specific labelling I am looking at two options:

• Red count: Zig Zag ===> Price is in the final wave (5) of (C)

• Blue count: Double Zig Zag ===> Price is extending the wave (A) of the second Zig Zag

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