Two days after that update, the index spiked to the (green) 138.20% Fibonacci-extension at SPX4214 (The index got to as high as SPX4219), and then dropped to SPX4128 on May 4, which is close to the (green) 100% Fib-extension at SPX4114. That sufficed for a classic Fib-based (green) wave-3, 4 structure. However, it then rallied to only SPX4238 two days ago and then dropped to as low as SPX4057 today. See Figure 1 below.
Figure 1. S&P500 hourly chart, the focus in this update is on the green and grey inserts
The above-described path was less than ideal as the rally to SPX4238 fell short of the ideal SPX4375 target. This presents a conundrum. Was SPX4219 (green) minor-3, or was it SPX4238? Alternatively, did (green) minor-5 already top? The latter would be relatively short of its ideal target (3%), but nothing states the market must always follow an ideal textbook, patterns, far from it. The market owes us nothing. All a 5th wave does is make a higher high, and so far, it appears it did.
Now, if SPX4238 was indeed only minor-3, then minor-4 is now underway and likely complete as it must hold the 76.40% extension at SPX4052. This level is lower than the previously mentioned SPX4095 level because, in this case, minor-3 did not reach its usual potential (the 161.80% Fib-extension at SPX4276. Today the index dropped to as low as SPX4057 and thus essentially stopped right where it had to. This lower support level also means the S&P500 should “only” reach the 176.40% Fib-extension at SPX4315+/-5 for a typical “wave-5 = wave-1 “relationship.
Bottom line: With the lower than anticipated top and the index dropping to must-hold support, we will know soon enough the market’s intentions: below SPX4052 and the red arrow for (black) major wave-4 becomes operable, targeting SPX3725-3850 ideally. Or, back above SPX4215 targets, ideally, SPX4315+/-5 (green arrow).