The only thing that can bring back the idea that we have already started a big Wave 3 down is if we tank here, and I mean like 800 DOW points in 3-4 days and in a row.
Tough to come up with a new target for B, but 1150-1160 looks like a potential stopping point, with 1121 being really the rock bottom before thinking that we are in that big wave 3 down already. Considering we broke our flag south, I would expect the market to push this to the extent to confuse everyone and probably reach somewhere in the 1121-1150 area. How we get there will be important.
Keep in mind though, 1204-1216 has some strong support. So its possible we just stop there.
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Key Levels
Upside -- 1226, 1240, 1248, 1263
Downside -- 1206-1210, 1184, 1158, 1121
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SPX Daily;
Theres the clear strong break.
But you can see we have some support right here. We also have a Fib tracement that we bounced off of today (sorry this is unlabled in the chart, but that was the low today). Plus we have the 50dma right below us.
Getting back under all the moving averages could potentially be very bad for the market. But until/unless we get below 1121, we cannot really consider being in wave 3 down yet. If we start tanking here, like 100-300 points off the DOW everyday for 3-4 days straight, then its back on the table. For now though, we will operate in a manor that we believe the market will slide to 1204 and if 1204 breaks, then we may see something under 1150 for this B wave.
As has been usual lately, how this trades is important. How violent and how fast it is.
GL
CJ
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