Are We Really Going Down?

Well, as of the time of my writing this update, the impulsive upside set up for wave (v) in yellow has clearly invalidated and there is a very clear set up that is pointing us down to at least the 7400SPX region for a 3^rd wave decline. And, the key point to note is that as long as yesterday’s high (wave ii) is not breached, pressure will remain down in this set up.

In the micro structure, we have either completed waves (i)(ii) of wave iii of 3 or we are only completing wave (i) as I write this, and we can still see more of a wave (ii) bounce. But, once the market breaks down below 7625ES (the .764 extension of waves i-ii) it makes it likely that we are already in wave (iii) of iii of 3 and it should feel like a waterfall decline.

Of course, I now have to come up with an alternative wave count. And, that would be a more extended wave (iv) in yellow. But, this is not going to be a consideration unless and until we see an impulsive rally over the wave ii high.

So, the key point to again focus upon is that as long as the market remains below wave ii in the downside set up, we have a 3^rd wave decline in progress. A break down below 7625ES should really get the ball rolling in that regard.

However, the alternative is going to take hold should we see an impulsive rally over the wave ii high. Parameters remain very clear and we cannot ask for much more than that.