I am expecting/my analysis is showing Alternative 2 but am prepared for the possibility that it will break out sooner and in this case will follow Alternative 1. In case of Alternative 2 I will look for a short term sell setup as price action will retest the yellow and go for a 3rd impulse down
Approximately the same setup is setting on the daily TF as well, so I will consider keeping a position open for a longer period of time as well.
Please do not follow my entry suggestion blindly since I am always adapting it according to the actual price action. You have to have a well tested strategy with good money management for entering such a trade.
Have a nice day!