I REMAIN SCHEPTICAL BUT GOOD THINGS CAN HAPPEN WHEN THE MCCLELLAN OSCILLATOR IS ABOVE THE ZERO LINE
I remain sceptical that price has already established the bottom of the correction from the May 22 high but I have to remain open-minded since the breadth thrust of the McClellan Oscillator could morph the "once" (2 days ago) likely larger downward correction into a larger sideways pattern that could form a Triangle. (Holding pattern for the summer, in order to wait for the next bullish catalyst).
We have to respect the fact that bearish patterns do not pan out when the McClellan Oscillator reclaim the Zero Line.
Yesterday I discussed several short-term "bearish" EW counts within the scenario of an uncompleted corrective pattern. While these counts are still valid, today I add the option of a sideways pattern that could form a Triangle (Grey count).
If bulls reclaim the 0.618 R = 1639 of the 3-wave down leg from the May 22 high then the Triangle option could become the front-runner scenario.
So far we have a weekly Hammer, which is indicating the likelihood of more upside action for next week. Even a weekly Doji, provided an eod print above the 20 wma which stands at 1586 will be a win for the bulls.
Regarding the shorter time frame scenario, usually such a strong "oversold" rally is not just a one legged affair so the odds favour a Zig Zag structure (Price will establish a higher low in the following pullback).
I don't know if yesterday's hod has established the top of the assumed wave (A), since the choppy price action following the hod could allow another higher high, but the main idea is that if the gap at 1588 is not closed I expect at least one more up leg that could jeopardize the "bearish" EW counts.
Keeping in mind that today is end of month/quarter/first half, so I guess that will not see much bearish activity.
Have a great weekend.