Last update noted that the rally had stalled at the inflection zone, and I wrote that "downside risk has begun to outweigh upside potential." That turned out to be true, as SPX dropped roughly another 100 points from there.
The market seems to have formed an impulsive decline, so we probably have to presume at least one more impulsive decline is still forthcoming, although we might see a bounce in the interim:
On the chart above, I'm allowing for the possibility of a more complex correction prior to C/3 kicking off for real -- but currently both preferred paths are pointed lower. One ends at a retest of the low, while the other continues to new lows. New highs from here much be viewed as an underdog at present.
Bigger picture is unchanged from a month ago (though I've adjusted the C/3 targets by about 10 points):
In conclusion, while there are a few more complex patterns that could show up here, we'll simply have to try to adjust to those in real-time if/when they show up. Barring that, we should probably treat this as if 3/C has already begun, or at least as if a retest of the zone near the mini-crash low is on deck. In both cases, it appears the market is still pointed lower. Trade safe.
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