However, since the index has now exceeded 2107.4 and therefore moved back above the presumed starting point of the expected post-triangle thrust without having first approached the downside thrust target, I must re-assess the wave structure down from 2137.1.
To recap: I still view the entire 2009-2015 rally as being a "b" wave of the 4th wave of Grand Supercycle degree.
Given both the historically overvalued state of equities and extreme levels of margin debt at present, the apparent pattern of chronological equidistance between S&P 500 market tops in 2000, 2007 and 2015 that suggested a top "due" in May which has, so far, proven correct, and the fact that the "b" wave has reached equality with the "a" wave from 2000-2009 and not exceeded the 2000 peak (the top of Grand Supercycle Wave 3) in inflation-adjusted terms, I am strongly inclined to believe 2137.1 was the ultimate high of Wave 4 before its wave "c" down begins.
When a "b" wave completes, a following "c" wave ensues as a 5-wave (impulsive) structure. However, I find it very unlikely that the decline from 2137.1 to 1833.5 was impulsive. It appears corrective.
How then -- one might wonder -- could the final high of Wave "b" have been reached but the impulsive wave "c" not yet have begun? Under what circumstances could there be any interim?
The only possible answer is: Assuming wave "b" is a contracting triangle, the high point is not the end of it. A triangle is complete when contracting waves (a), (b), (c), (d) and (e) have all developed. The high point is only wave "(a)". The true end is wave "(e)", which will be lower than wave "(a)", and this is where the post-triangle thrust (i.e. wave "c") will begin.
A post-triangle thrust would give this indecisive market the necessary propulsive downward force that is called for in the impending "c" wave. A standing wave bouncing between narrowing extremes and picking up momentum over a few months will finally break through the weaker deflector, to the downside.
What would this imply in terms of trading the S&P now and going forward? The present implications are that waves (a) and (b) of the triangle wave "b" are complete. Going forward, Wave (c) is nearly complete and should not go higher than wave (a). Wave (d) down should not exceed the low of wave (b) at 1833.5. Wave (e) should not exceed the high of wave (a). Assuming all goes according to pattern, when wave (d) completes we measure the vertical distance between the converging of (a) & (c) and (b) & (d) extended all the way back to the date of the 2009 low to assess the minimum downward thrust distance for wave "c" that we should anticipate to start from the end of wave (e).
Now, price will make a corrective rally up in wave (iv) to likely end between 2047.6 and 2050.4 (.382 to .5 of wave (iii) ). It should not exceed the end of wave (i), or should not exceed it significantly if wave (iv) forms as a triangle. So just a few points above the end of wave (i) is a good place for a stop loss order on a short sale targeting 2030.
After that, I expect a final decline to 2029-2030 to end wave 5.