If this is the case, the deep wave (ii) retrace has certainly done its job in terms of its magnitude as well as its impact on sentiment. We'll see what happens in overnight trading.
[4PM] I want to take a step away from the squiggles and focus on the larger time frame count.
Obviously, the bearish count is that 3-down or (C)-down has started last week, per the grey labeled counts in Chart 1 (SPX) and Chart 2 (RUT).
The bullish count has 2-up or (B)-up still in progress, with the added benefit of bringing the counts in SPX and RUT in sync. Awareness of this possibility should be helpful in risk management by strategic bears or short term positioning by tactical bulls.
These near term bullish counts are highlighted by the blue and pink labeled counts in Chart 1 (SPX) and Chart 2 (RUT). Also note the positive divergences on these charts.
