FWIW, we shall see ... .618 of the drop to 1737 SPX is up around 1807.
If it plays out then we need to decide if the entire structure is only a "wave 1" from the top, or if we have finished some larger-degree wave 4 in very dramatic fashion.
The outcome most likely depends on the FOMC meetings and announcements this Spring, particularly as regards the QE policy. I can't stress enough how important this is, so I will do so below in BOLD TEXT.
The April 30 and July 30 FOMC releases are both on afternoons where a GDP print is announced in the morning. If we print a red or recessionary GDP number, and the Fed decides to wind down the QE program, continuing the "taper", later that day, IMO, the markets will immediately waterfall into a 2008-style collapse. The Fed will be seen as tightening into a recession. Game over.
The April 30 meeting is particularly sensitive to this thanks to seasonal considerations, "Sell in May" and all.
I'll see if I can do a better job of a 1929 mock-up over the weekend. This is just a quick hack.
|SPX with 1929 Crash overlaid|