On Tuesday market closed at 1357, the Fibonacci 78.6% retracement of the uptrend from wave 4. Below this level, the Ending Diagonal count to 1440 is no longer favoured. However it can only be eliminated below the wave 4 low at 1340.
SPX's clean break below 1375 suggests that wave (4) may have begun. A backtest and subsequent rejection of the 1375 level will strengthen the case that wave (3) has ended.
Wave (4) can retrace up to 50% of wave (3) to around 1300/1310. More likely it will find support at the wave 4 low of 1340. For alternation with wave (2) it will most likely take the form of a Triangle, Flat or combination.
For clarity, here is the Ending Diagonal count:
Wave (4) can retrace up to 50% of wave (3) to around 1300/1310. More likely it will find support at the wave 4 low of 1340. For alternation with wave (2) it will most likely take the form of a Triangle, Flat or combination.
For clarity, here is the Ending Diagonal count:
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