From the Aug 8 post SP 500
"Wave C: Prices move impulsively lower in five waves. Volume picks up, and by the third leg of wave C, almost everyone realizes that a bear market is firmly entrenched. Wave C is typically at least as large as wave A and often extends to 1.618 times wave A or beyond."
Active Mo. Daily
Note the -4- does not exceed the 50% retrace point of the -3-.
The SP has likely completed the corrective -4- wave, and is resuming it's downtrend, beginning the -5- of 3 of C. The move today has been accompanied by big down volume (78%) and breadth (89% declining), tending to confirm the wave count, and the likelihood of lower lows.
The -5- of 3 will = .618 of -1- thru -3- @ 1035. Keeping a close eye on the development of the -5- as it makes new lows, will be important in anticipating the 4 bounce.
Active Mo. Hourly
click to enlarge
There is as yet no positive divergence on the hourly RSI. The -4- wave is choppy and structured in a series of abc's. The (1) of -5- down is a very typical impulse wave.
The coming (2) wave can of course be a deep retrace back up. This market has a nasty habit of deep 2 wave retracements, and for a discussion of that pls see the June 3 post,
SP 500 - Whats going on?
BTW you may note the consistency and accuracy of the wave count there, and the early warning of the sell off to come, in the May 3 post ;
SP 500- Are we there yet?
Thus far no extension in any of the legs, so looking for it in the 5 wave position, which is common.
Targets
From Aug 8 SP 500
" The A wave low of 666 was a Fibonacci .61 retrace of the 1530 point move up. The C wave will have some sort of Fibonacci relationship to the A wave.
C=A @ 452.50
Also the next lower Fibonacci retrace of the 1530 point move up comes in about there;
.76 = 425
(There is also some support at 450 in the form of a 4th of much lesser degree there in 1994.)
C=A in % terms, ie a 58% pullback, @ 590
C=.618 of A @ 804
Classically a C of Grand Super Cycle Degree, in the final 5th wave, would be expected to be accompanied by a great deal of social unrest, some of which we have just started to see.
Block Party anyone?
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