SPDR S&P 500 (SPY)

[Two-timer]

Here we go again. McHugh has some interesting observations. "Catastrophic wave C has started" but we should rally to new highs first? Guess I don't understand how we can have both? Two

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Stocks have fallen in a parallel trend-channel since the top on October 21st. Tuesday's move looks to have formed a sideways triangle which suggests a wave four was forming. That means another leg lower, small degree wave v down should be next. That should establish a bottom for the first leg down of wave (C ) down. We annotate those patterns on charts on page 8.

Friday's decline took prices below the bottom boundary of the S&P 500's Ascending Bearish Wedge pattern, and decisively below the bottom boundary lines of the Rising Bearish Wedges from March 2009 in the Industrials, S&P 500, and NASDAQ 100, and a significant rising trend-line in Trannies, increasing the odds dramatically that catastrophic wave (C ) down has now started. Therefore, we have moved our top Elliott Wave labeling to this scenario, and moved our alternate labeling to the scenario that another rally to new highs, wave (E) is coming before the top.