With the action we experienced this morning, I can now ALMOST count a relatively nice 5-waves down off the recent market highs. While this is a first indication that a major b-wave high may be in place, I am no longer of the opinion that a further decline is a buying opportunity attempt, assuming we reach our ideal target for a 5th wave today. And, with 5 waves down off the high, it is now up to the bulls to invalidate this potential.
With the market dropping from the ideal wave [iv] resistance, it is now approaching the ideal target for wave [v] in the 4437-4455SPX region, which represents the 1.764 – 2.00 extensions of waves [i][ii] in this initial decline, which should complete wave i of  off the recent b-wave high.
As long as the cited support holds, I am expecting a multi-day corrective for wave ii, which may be shorted for those who want to play the short side more aggressively.
Now, I want to reiterate that an initial 5 waves down of this degree has solidified, in my mind, that we have a b-wave high in place. But, to make this potential a very high probability, we still will want to see a 5-wave decline at one wave degree higher, which is the completion of the larger degree green wave .
Moreover, I want to reiterate that it is now up to the bulls to invalidate this potential. And, if the bears can take us down in the coming month in larger 5-wave decline in wave , then I am going to strongly caution all our members regarding their holdings on the long side, especially during the wave  corrective rally, which will likely be your last opportunity to lighten up your long positions before what may be a 1000+ point decline.
I know this may sound very bearish to some, but this is the potential ramifications of a 5-wave decline. Does that mean this is certain? No. But, I would ballpark the bearish potential at around 60-65% at this point in time. And, should we get the larger degree wave  completed in 5-waves in the coming months, then I would suggest that probability rises to 70-80%. But, for now, I am not interested in the long side unless the bulls are able to invalidate this downside potential. And, I will certainly outline where that can be possible.
Yet, I also want to note that this still means we have an estimated 35-40% potential this can invalidate. So, please keep that in mind before you mortgage the house to short this market. Risk management still must be respected.
For now, we need to see the 4437-4455SPX region hold as support, and provide us with a corrective rally. Should that corrective rally take shape in the coming days, then it would point us towards another decline in the coming weeks, which can take us down to the 4270SPX region, if not even a bit deeper, to complete wave . Once that larger 5-wave decline for wave  completes, I will don my bear suit with all its accoutrements. But, for today, I still want to see us striking our ideal target below in the 4437-4455SPX region.
As far as an alternative count, well, I am going to leave the yellow a-wave as the low. There are a minority of times that an a-wave can be a 5-wave structure. And, it is for this reason that I am wanting to see the next higher degree 5-wave decline confirm the bearish count with a higher probability. But, with an initial 5 waves down, I have no intention of buying a pullback in this market, unless and until the market breaks the bearish potential.
Mike will follow up with an afternoon update as well.