With the downside further follow through today, the market has now placed itself in a position where it will make a relatively important decision based upon my work.
You see, in the primary pattern I have been following, I have been expecting a bigger [c] wave decline from these heights. However, in order to see that as the higher probability, I need the market to complete a 5-wave structure off its high, ideally into the 3020/30SPX region.
So, as you can see from the attached 3-minute ES chart, we are now in the market pivot region which differentiates between a corrective decline and an impulsive decline. Within our Fibonacci Pinball structure, wave [iii] of iii targets the 1.-00-1.236 extension, which is where we bottomed today. Wave [iv] of iii then bounces back towards the .618-.764 extension. And, as long as that resistance is respected, the market continues lower in wave [v] of iii towards the 1.618 extension, which is where we have a blue box below.
However, if the market is able to clear the market pivot between the .618 and .764 extension, it provides us an indication that the decline is likely a corrective decline. That would mean that the rally through this market pivot would be a [b] wave, as outlined on my 3-minute ES chart.
The reason this makes a difference in the bigger picture is that it would likely preclude the market from being in the bigger [c] wave decline, and would suggest that this decline is likely corrective in nature. That would mean I will have to move towards the blue/purple counts, which would not provide us as deep a pullback, and would likely keep us within the purple uptrend channel on the 60-minute chart.
So, I think the next 24 hours can be quite telling for our bigger picture in the market. And, if we do not see follow through in impulsive fashion over the next day or two towards the 3020/30 region, then I will likely be moving towards the blue/purple alternatives as my primary expectation.