As you can see from last night's update, all the counts I'm following, shown on the short terms charts of the 5 Options, have us in a 4th wave of some degree. Remember, each of these counts could be the one that is in force in relation to all of the Options. We just can't know at the moment which count is playing out (in the same way that we can't know at the moment which Option is correct - see the 60 min counts for the bigger picture in relation to each Option).
As I said last night, the decline from yesterday's high doesn't look like 5 complete waves, which is what we'd need to see for a 5th wave down.
Here is a 1 min chart showing a possible count for the move from yesterday's high so far:
SPX 1 min chart:
This count suggests that we still need another down-up-down-up-down to complete 5 waves. As you can see from the chart, a possible target for the end of the 5th wave is about 1020. Of course, this is just a possible target and could be exceeded, but equally, may not be reached.
Of course, for each of the counts shown, the completion of 5 waves down from yesterday's high will mean different things:
For the count shown on the chart of Option 1, its a plain and simple 5 waves down from 1131.23, which would complete a wave i down (for Option 1 itself) or a wave A of some degree on the more bullish Options, 4 and 5. So, we'd then expect to see a 2nd or B wave rally retracing the whole of that decline from 1131.23, so it could be substantial. For example, if the decline ends at about 1020, a 61.8% retracement would take us back up to about 1090.
For the count shown on the chart of Option 2, we are in an extending 5th wave, with 3 nested ones and twos. The end of 5 waves down from yesterday's high would complete wave [3] of v (using the label degrees on that chart). So, if that is the correct count, we would see a bounce in a 4th wave on all of the Options, not a 2nd wave, so it would be expected to be more of a moderate bounce than if the count shown on the chart of Option 1 is in force. It would be retracing the drop from 1085.95, so if we end wave [3] at about 1020, a 38.2% retracement would take us back up to about 1045.
For the count shown on the chart of Option 3, 5 waves down from yesterday's high would, on the main count shown on that chart, put us at the end of a 3rd wave also ( a 3rd wave within a 5th wave), so, again, only a relatively moderate bounce in a 4th wave would be expected. We'd be retracing the drop from 1082.60, so if the decline ends at about 1020, the 38.2% retracment would be around 1045.
Only if the alternate count shown on the chart of Option 3 is in play would we expect a more significant 2nd wave rally retracing the whole of the decline from 1131.23. If the decline ends at about 1020, then a 61.8% retracement would take us to about 1090.
For the count shown on the chart of Option 4, 5 waves down from yesterday's high would be the end of wave i of (iii), using the label degrees on that chart. We would then get a 2nd wave retracement, but it would only be retracing the drop from 1082.60. A 61.8% retracement would take us up to about 1060 (and 1082.60 would be the invalidation point for this count since wave ii could not exceed that level).
For the count shown on the chart of Option 5, 5 waves down from yesterday's high would be the end of wave iii of (iii), using the degree labels on that chart. Again, we'd be looking then for a 4th wave rally, retracing the drop from 1099.64. If the decline ends at about 1020, a 38.2% retracement would take us up to about 1050.
As I mentioned last night however, we can't rule out the possibility that we are in an expanded flat type correction with the decline from yesterday's high being the B or X wave of that correction, wth a C or Y wave back up to come.
So, if we get just a quick down move (to about where I have the green 3 on the 1 min chart above) and then rally hard beyond what would be expected for a 4th wave bounce (say a 38.2% retracement), I'd be on alert for this possiblity playing out since we'd only potentially have three waves down from yesterday's high. If we rally above 1042.44 (the low of what I have labelled as wave 1 of (3)), then, on the count as I have labelled it, we would almost certainly have only have three waves down from yesterday's high and this expanded flat type correction would then seem to be the most likley count for this move (it would likely be a 4th wave on all of the counts shown, except for the count shown on the chart of Option 4 where it could be a 2nd wave, so could retrace up more deeply than on the other counts - I've mentioned the 1060 area above).
