This is my view on the latest development in SPX . I suspect we again are dealing with a leading expanding diagonal, trying to pave its way down, breaking through a wall of massive optimism.
The role of a is to resist the trend change to the latest possible stage. Waves 1-2-3 are viewed by the market as a mere correction and are deeply retraced by wave 4, which, if fails, gives rise to a more powerful wave 5. So, the inflection point in the level of confidence in the old trend occurs at the end of w4. And it's because of this twisted behavior the leading diagonals are usually expanding, while the ending diagonals are contracting (there the confidences in the current trend grows steadily from beginning to end).
In our case, if 2096.5 is not bettered, then we will see wave 5 of the which should bring us slightly below 2000, as shown on the chart. This will complete w1 of a larger degree decline in wave C of w5 of a larger . The invalidation point of the scenario is 2096.5 - breaking back above this level will require us to revisit the labeling.
The final target for the decline is around 1730, but I am beginning to suspect that 1550-1600 may also be possible, given such a degree of optimism in the market.