With the downside follow through today, we are now approaching the .382 retracement of the rally off the June lows. So, are we almost done with the b-wave pullback? Well, allow me to remind you of something I noted yesterday:
“Now, another point I made this morning is that the potential [a] wave was quite shallow, as it slightly exceeded the .236 retracement of the a-wave. Normally, the [a] wave will target the .382 retracement, which, in our case, is in the 3900SPX region. Therefore, there is some potential that what I am showing as the [a] wave low may actually only be an a-wave within a bigger [a] wave low.”
While this pullback is large enough to consider it all of the b-wave as we approach the target box, I have to keep that larger, more protracted [a][b][c] for a bigger b-wave on the chart for now.
What will eventually distinguish between the two is something we know about c-waves. A c-wave is more often an impulsive 5-wave structure. Therefore, if we see an impulsive 5-wave rally off support (once we complete this b-wave), then we can view that as wave 1 of the c-wave. However, if the rally off support is clearly corrective, then it would signal that this b-wave is indeed going to take more time and take us deeper into our support box.
For those focusing on the micro, it looks like the [c] wave of this b-wave is taking shape as an ending diagonal, which explains a lot of the overlap even in the [c] wave. And, it seems we still need a 4-5 to complete this [c] wave. So, that may be what we do tomorrow into the Fed meeting.
Overall, I am still expecting that we can rally in the coming week or so into the 4100-4150SPX region to complete what I am tracking as the c-wave of wave [iii] in a potential leading diagonal in the green count. But, if the rally off our support box is not clearly impulsive, then this b-wave of wave [iii] may take us a bit more time.