Bears finally have their day

Today's sharp decline came straight into our critical support level of 1655. With the technical damage done, and the way the current pattern looks, I have to heavily favor the red count at this time. That means there is a good chance we are on our way to sub 1600 in the near-term. However, it is unlikely to happen in a straight line. The ideal path, as labeled in red on this chart, places us either in a wave iv of 3 bounce, that should maintain below 1670, or possibly still completing wave iii of 3. Wave v of 3 should target between 1650 - 1644 before seeing a larger wave 4 bounce back above 1660. From there, a final 5th wave down below 1640 would complete a full 5 waves off the 8/5 high, and confirm that sub 1600 and even possibly low 1500s will be seen. The corrective bounce after 5 waves down can take us back to the 1670 region, setting up a wave 3 or C down, which we will be looking to short. 

Although a new high from here is becoming increasingly unlikely, it is still a possibility. A break of 1670 would need to be seen first as an initial signal that scenario is playing out, and above 1680 would confirm. 

 Elliott Wave Chart