Along with sliding indices all over the world, the S&P 500 lost 2.2% after finalizing a Subminuette black five wave sequence just shy of 5 vs. 1 equality and the 138.2% Primary red B vs. A wave Fibonacci extension. The 138.2% is a very common B wave turning point of an expanded flat structure. The Dow, has yet to make a high above the Dec 31st high falling apart at the 16502 after it completing a five wave sequence up from the Minor green wave 4 bottom.
If the S&P put in a top, then the minor move up in the Dow from the Feb 4th low would be counted as a truncated Minor 5th wave 5 vs. 1 at 61.8%, which it hit to the point before rolling over. This would make the Minute green 5th wave compete at the 16502 high just past 61.8% 5 vs. 1 relationship.
The NASDAQ can also be counted as completing a five wave sequence at minute degree when it hit 4371. Bear in mind that all three indexes are still in heavy long term Primary degree Fibonacci harmonic zones which are formidable resistance. With oscillators diverging, extreme sentiment readings, China’s recent economic woes and the crisis over in Europe getting worse as the weeks go by, we could be heading for a deep correction in stocks and maybe more. The only bright spot, I can see is that some indexes have only cut out three wave sequences so far and Transportation’s move up from the Feb 5th low, is still in need of two five wave moves up to complete an impulsive wave structure at Minute degree. On the bad side, if the three wave moves turned out to be impulses down then proportionately the 1-2-1-2 sequences would be the first legs down of devastating moves down in stocks all over the world.
Even though the Dollar Index has been moving down, it has so in a counter trend corrective sequence since the 8158 top. The buck has very little room to keep falling and should start to move up in a 3rd wave impulse to near the 8885. If the buck moves down past the critical 78.99 support, then the immediate impulsive move will be invalidated. The EUR/USD is confirming this move being that it is at the end of an expanding flat pattern dating back to the Feb 2013 high. Investors have been keeping an eye on central bank talk causing some currencies to move against the buck. However key support and resistance levels are still intact. Do not forget that in the end sentiment trumps. Even interests rates take a back seat when fear moves into the charts.
And lately, fear has investors buying bonds. The US 10 Yr. has moved down off of its corrective sequence of the March 7th 2.82 high and is heading down to complete its third leg of a zigzag sequence down from its Dec 2012 high at 3.03. The counter trend target is as low as the 2.37.
Gold and silver are just about finished five wave sequences to complete flat structures from their Dec 31st 2013 lows. Structurally gold looks to be ahead of Silver and could turn down now off of its 1388 high. Silver, however, looks like is needs to push up in one more wave above the 22.20 high it put in Feb 24th. At minute degree, both metals do have room to the upside with silver up to the 25.00 and gold to the 1433. Keep in mind that the metals are in long term corrective structures and could very well stay in them for a while longer before heading down to lower levels. However, proportional standards have been met for the corrections on both silver and gold and they should be heading down soon—both being at the end or close to the end of minute degree flat structures.