Heading to 1900?

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The S&P 500 (SPX) price structure has plunged from the confines of its Dec-Aug top formation, and through its Oct 2011 support line in the vicinity of 1992.00.

Although my near-term work might argue for the emergence of a two-way trade, my intermediate-term work suggests strongly that the SPX has unfinished business on the downside — to 1900 at a minimum in the hours and days ahead.

Such a scenario would amount to a 10%-11% correction off of the May-July highs.

That said, however, if a garden-variety, 10% correction does not include a major capitulation, then we should be aware that a test of the Oct 2014 low will represent a 15% correction, while a test of the Feb 2013 low will amount to a 19% correction off of the highs.

full-Cf75QAolKpvvG6Xi34KWjOriginally published on MPTrader.com.