The pattern for this would be an irregular flat 4th wave, where the B subwave actually makes a new high. A and B of 4 are in, and we began C of 4 down yesterday. I am looking for a bounce tomorrow and a move up to around 1564.
Friday, with a slew of data and no POMO scheduled, could be a real doozy. If 1 of C of 4 was 23 pts, then 1.618x that would suggest a 37 pt drop. Yes, probably all of it on Friday. Wave 4 would then finish up mid-next-week when we reach the lower boundary of the channel.
What makes this pattern particularly perverse is that someone looking for a top at 1573 will indeed see a five-wave impulsive move down, without realizing that it is actually the C wave of a correction. Ouch.
But we wil still have the "Jaws of Death" trendline just above us, so we can race up to tag it into the May 1 FOMC or so. The midline of the channel actually looks to be just after May 1st, so maybe the FOMC is the "good news" that ends the rally a day or two later. Or what the Fed has to say, takes a day or two to sink in and draw a broader reaction from the markets.
Something like that.