While I am still looking for this pattern to potentially complete with another drop in the market, the market has still not given us a solid indication of how it intends to set up that drop.
Our primary count for quite some time has been tracking an ending diagonal for the c-wave of wave (ii). And, it has morphed into an expanding ending diagonal if it does continue to play out. But, within expanding diagonals, we “should” see the wave 4 still rally back towards the 2160SPX region.
But, there are several ways we can move up to that region. As you can see on the chart, we may be caught within a bigger b-wave triangle within wave 4, which can take us well into next week before it is completed. Within that structure, we still need to drop again to finish off the c-wave of that triangle. But, we would need to hold the 2124-2127SPX region in that drop. (An immediate break down below 2119SPX still leaves the door open to test the bottom of the target box).
The other potential way to rally to the 2160SPX region would be if the 4th wave was to play out as a WXY pattern, which would mean we need to break out over yesterday’s high to trigger. But, the micro structure does not strongly support this potential at this time. So, as long as we remain below yesterday’s high, I will continue to track the b-wave triangle.
Ultimately, I remain steadfast in looking lower as long as the market remains below 2170SPX. It would take a break out over that level to open the door to wave (ii) having completed, as shown in blue.