Yesterday saw another down day for the US market but one that was worse than last week as the S&P500 fell 80pts or 6.6% to 1,119pts and easily sliced through our earlier wave iii target of 1,175-1,200pts. The next target is 1,058-1,128pts based on 2.0x-2.618x the length of wave i. The daily RSI is extremely oversold at only 16. Once this downleg ends, the S&P500 should experience a sharp but short rebound that will complete wave iv. Yesterday’s trading volume was one of the highest for the year. As those who want to sell would have sold yesterday, we could be close to a selling climax assuming that it did not happen yesterday.
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