Continuation of the LD

Today's rise saw to a continuation of the LD count, coming just shy of the 1.618 fib in wave 3. From here, I would like to see a 3 wave decline overnight or into tomorrow that reaches 1586 with the possibility of going as as low as 1579.50 in a wave 4 of the LD. These are the main support levels for the LD count. The alternative, in blue, is a continued meltup from here into an initial target of 1607.50 to complete the a-wave without the wave 4 decline under the LD count. Once the a-wave is complete, we should see a 3 wave retrace in wave b next week into the 1570-1580 region, setting up a long trade for the c-wave higher to complete the larger b-wave of this correction.

Garrett Patten is a senior analyst at ElliottWaveTrader covering both U.S. and international equity indices as well as stocks.