Following Through To The Downside

With the continuation lower, the structure of this decline seems to be following along in wave (3) of the c-wave of wave 3 in the ending diagonal (c) wave we have been tracking.

As of my writing this update, I think there is still potential for wave (3) to extend a bit lower. But, if the low is in already, then we will likely see another leg higher towards the resistance box for wave (4). And, as long as that resistance box is respected, I am expecting a wave (5) lower in the coming days to complete the c-wave of wave 3.

Should the market drop lower in wave (3), I will then lower the resistance box for wave (4).

There is one issue that is sticking out to me right now. If we follow this path to its ideal target to complete the (c) wave, we will only be targeting the 7400SPX region. This is way shy of not only the ideal target box for wave 2 on the 60-minute chart which begins at 7100SPX, but it is also short of the modified target for the (c) wave of wave 2 in the smaller box in the 7300SPX region. And, if we come up that shy, it still leaves potential for this to be the yellow wave (iv). And, it will cause some amount of complexity in determining what the rally thereafter will be.

For now, I am simply going to follow the path lower, as long as we continue to respect resistance. And, maybe we may see a more sizeable extension to the downside that takes us beyond our standards and solves the yellow problem I noted above. We will see.

One last point I want to make is that, based upon the yellow and blue counts we are tracking, it would seem we may remain in this region for some time until we complete all of waves i-ii as well, whether that be in blue or in yellow. So, we may be in for a bit more whipsaw within this region so please prepare yourself.