In Between Fibs

We appear to have closed in between fibs (the orange box). About 30 points below us we have a confluence of two of them.

At 4103 (earlier I said 4104 but that was a typo and is a meaningless difference) Green 3 will equal 2.618 times the length of Green 1 and Blue 5 (of Green 3) will equal Blue 1:

SPX

That is a possible place for the decline to rest, though if we go materially below that level, we may need to look to the 3.618 below us. If we do rest there, we can use the proposed green channel to try to detect the Green 4, which should consolidate and challenge the upper rail in some way (either in price or in time). Earlier I suggested a larger right shoulder possibility, but we may not get much of one.

After that, i would expect another low for Green 5. I am open to the possibility that it becomes quite deep. One reason is that we do not have a lot of structure to our left that can support us if we head much lower (green arrows):

SPX

Another reason is this enormous bearish wedge that appears to be forming (the large orange structure):

SPX

Now that we’ve gotten going, we might as well go all the way and visit the lower rail of that.

And the last reason is: I think most of us have been expecting this rally to fail. So what’s the surprise then? Maybe it’s that once we get the green 4 and start heading lower, it will look so obvious as a 5-wave completing, that everyone steps back expecting a bounce and maybe we don’t get it (here, but we do only much lower).


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