Markets finished down over 2% on a very rocky day...a couple explosions went off during the Boston Marathon. Overall not the most pleasant day.
The target of 1555 was reached today though it seems there is still some downside risk remaining to this leg. My guess is we are in wave 1 of a larger wave A or currently finishing up wave A of int. 4. Likely the former since I'm under the impression that this is the beginning of a much larger correction.
If we are in wave 1 of a larger wave A then:
If wave 1 was the leg from 1597.35 to 1579.97 then 2.618*w1 (for wave 3) gives a downside target of 1543.6. 1.618 was 1560.8 which already broke. If we reach somewhere in 1545 area, then the wave 4 move up is likely somewhere in 1554-1561 range which is the back test of the broken uptrend rally from November.
After a bit more downside, my target is somewhere 1554-1561.
If we are in the process of wrapping up wave A of int. 4 then wave B ought to take us all the way back up to 1580s. However I find this very unlikely unless we bounce hard tomorrow.
In either of these scenarios, I'm playing the bounce but will re-short after the next wave finishes because in either case here it's going to be a doozy.
Have a good one.