Clearly, the market decided it wanted to take the direct route to the lower targets we had on the chart, and, at least for now, it seems to be following an impulsive structure to the downside for this 5th wave.
The question I have been grappling with is just how deep this wave (4) will take us. My targets when we began this correction were between 2424-2539SPX. Thus far, the a-wave has already struck the upper portion of that target region.
In the current decline, we seem to be targeting a 2.00 extension in the 2495SPX region. However, as I noted after today’s break of support that if we see strong extensions in wave (iii) of iii, then we could extend down to our ideal target region in the 2450SPX region, where the c-wave would be equal to the a-wave in this wave (4).
Today, the market dropped just below the standard 1.236 extension for wave (iii) of iii. As long as the next rally in the market remains below 2596SPX, and if the market can then extend down to the 2495SPX region for wave (v) of iii, we can certainly open the door to the 2450SPX region to complete wave (4). However, if we hold the 2527SPX region as support for the SPX for wave iii, then we may not be able to break below the 2495SPX region for all of wave (4). For now, the 2495SPX region seems like the minimal target we can see in this decline . . . again, as long as we remain below 2596SPX on the next bounce.
Now, since the great majority of the people on our sites are longer-term focused, please make sure you continue to focus on the fact that as long as the SPX remains over the 2400SPX region, our next targets exceed 3000 on the upside for later this year or early 2019. It would take a sustained break of the 2400SPX region for us to consider that we are in a larger degree wave 4, as presented in yellow on the attached monthly chart. So, ultimately, I think this is where most of your focus should be at this time.