With the drop we experienced today, the market took a more direct path towards our bottoming target for wave (ii). While the market may still try to complete this last c-wave down in an ending diagonal, at least for now, it seems it is developing as a standard impulsive structure down for this last c-wave.
The main resistance in this region is the 2111/12SPX region. That is the 1.00 extension down in the impulsive c-wave pattern down. Should the market be able to exceed that level, it “could” be a first signal that the market may have actually bottomed in wave (ii), but, I think it would more likely just be a bigger 4th wave setting up the dreaded one more lower low.
For now, the market seems to be in “bottoming” posture. Whether we need one more lower low or two is basically the question I have as I write this. We clearly are developing the appropriate positive divergences at today’s low, but I am still not certain that wave iii down has completed. While wave iii has struck the 1.618 extension down and bounced, we can still drop down one more time even in wave iii. I would imagine we need a bounce back to at least the 2111/12SPX region to give me a sizeable enough move to consider it a wave iv.
In summary, with this decline today, we should be very close to completing our wave (ii) pullback, assuming our count is correct. But, I still think we may have at least another day or two before we have enough waves to consider a “standard” pattern as completed down in this smaller c-wave.