This post by Daneric40 has been promoted from StockTock Social.

Another horrible down day. Volume picking up, VIX ticking up. Has this decline from peak some kind of huge ABC correction or wave 5 of 3 down? It looks like wave 5 of 3 down. The reason is the wave structure and the sheer breadth of selling. Once again we have some clear areas marked on the structure. Fibonacci expansion ratios helps identify some potential near term downside targets. Even if this was an “ABC” structure, the downside targets apply equally as wave C can extend by the same ratios as wave 3.

Primary count:
Markets are in wave 3 of 5 of 3 down. A “breakaway gap” has occurred yet again. Some downside Fibonacci targets for the end of wave 3 are listed on the chart. They range all the way down to 808 SPX. However extreme ratios would extend well beyond that. A 2.618 expansion ratio would take wave 3 down to 742. After wave 3 would be a rebound that could go no higher than 884. Most likely it would be limited to much less than this depending on how far the market drops. Think resistance bands such as 850 or 860.

Alternate count:
Markets are in a massive “B” wave correction from 1007 peak still in wave 4 of 3. If this was the case it would be an “expanded flat” in which new lows are established. Then a slog upwards to a new high above 1007. Seems impossible at this stage, but cannot be ruled out just yet.