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The decline may be over or within the next few trading days. Friday's low may be the price low for the correction. This late February decline was indicated as a possibility in the last blog update although I did not foresee a severe drop. Looking for possible strong 3-6 week move up that could retrace up to 70-90% of the correction.
Due to the severity of the decline wave 3 is no longer a valid count unless the current decline is wave C of a large flat from the April/2019 peak. The prior favored wave X count is now the best count once again for the move up from the December/2018 low to the February peak. A wave X is a middle wave between two corrective waves. The current correction wave can be a zigzag, flat or triangle so it remains to be seen which of these patterns will unfold in the upcoming months. I would say that the current move down is most likely the first part of wave A of one of those three patterns. That would indicate a new low below the current low in the next few weeks/months after the antIcipated 3-6 week rebound rally. It can't be ruled out that the current low is the end of wave A(and therefore a possible price low) for any of the above mentioned three corrective patterns. A strong move below Friday's low this coming week may negate this outlook.
The wave one count(of a possible diagonal) suggested previously as a third possibility for the December/2018 to February/2020 peak is still a valid count and would make the current correction the first segment of wave two which is usually a zigzag type corrective wave.
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| S&P500 chart showing ghost feed projection(candlesticks & white line) to mid April(click to enlarge) |
