SPY Bounce Soon | Markets Can't Continue to Sell Off
Based on the EW count, fib extensions, ending diagonal and bullish divergence, it looks like selling pressure is dropping and markets will see a bounce soon.
There are two possible larger counts for this correction we're in. It's unclear at this stage if the correction is totally done or if we've only put in the beginning of a larger correction. What is clear is that in both cases, a bounce is due soon.
We could have just put in an ABC (a full correction / in red) or just wave 1, 2, and 3 of a 5 wave impulse down (in dark blue), which would imply further downside and a bigger correction. Arguments for the blue count and further downside after a bounce are that we made a 1.618 extension of the first impulse in this latest impulse, which increases the likelihood that we are witnessing wave 1 and wave 3 in a larger impulse. However, there is Wave 2 and Wave 4 overlap in this latest wave, which suggests that we are seeing the completion of the larger move down (ABC correction). My primary count is an ABC correction (red).
Evidence for a bounce soon is daily bullish divergence and what appears to be an ending diagonal.
My likely targets for the bounce are the 0.382 retracement of the latest move. Typically 0.236 - 0.382 is the most likely wave 4 retracement. If we bounce the 0.5 fib and break the 0.618 retracement, the probability will shift in favor that the correction is finished and the red corrective sequence is finished.
There are two possible larger counts for this correction we're in. It's unclear at this stage if the correction is totally done or if we've only put in the beginning of a larger correction. What is clear is that in both cases, a bounce is due soon.
We could have just put in an ABC (a full correction / in red) or just wave 1, 2, and 3 of a 5 wave impulse down (in dark blue), which would imply further downside and a bigger correction. Arguments for the blue count and further downside after a bounce are that we made a 1.618 extension of the first impulse in this latest impulse, which increases the likelihood that we are witnessing wave 1 and wave 3 in a larger impulse. However, there is Wave 2 and Wave 4 overlap in this latest wave, which suggests that we are seeing the completion of the larger move down (ABC correction). My primary count is an ABC correction (red).
Evidence for a bounce soon is daily bullish divergence and what appears to be an ending diagonal.
My likely targets for the bounce are the 0.382 retracement of the latest move. Typically 0.236 - 0.382 is the most likely wave 4 retracement. If we bounce the 0.5 fib and break the 0.618 retracement, the probability will shift in favor that the correction is finished and the red corrective sequence is finished.
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