We have seen the expected pressure building towards the downside and is close to my first target at 121.26, which marks the 23.6% corrective target of wave 3. However, looking at the short term structure since the 125.90 we are currently working on wave iv and should soon see the final fifth wave down towards 121.71 as the first target for wave v and 121.26 as the next. As we now have a cluster calling for a decline to 121.26 I will expect to see this support tested soon, once tested we should then look for a correction higher towards 123.42 before the final move lower towards the ideal target at 117.28.
With the break below 1.5838 we knew, that the extreme time-extended correction since September 2012 was not over yet and more downside could be expected. But what is this monster? The best way to describe it is, that an expanded triangle is developing and if this is the case we need one more new low below 1.5390 to finish wave e of the triangle. The ideal target for this e-wave is likely near 1.5176, but it could extend all the way down to 1.5032. Not only are we looking at a major expanding triangle developing. since the 1.6359 we have likely been developing an expanding ending diagonal, which also calls for one last decline towards 1.5176. Short term I will be looking for one more decline towards 1.5682 to end wave a of red e followed by a correction in wave b of red e higher towards 1.5849 and then the final extended decline in wave c of red wave e down to 1.5176.