stoock market update

I don't have time to post charts but I do want to make a few observations.

The averages all dropped about 10% in about three days to this morning's early low. The Dow dropped briefly below its October 2014 low before recovering. That low was the minimum target for the 3 peaks and a domed house formation due to George Lindsay.

The S&P dropped has about 300 points from its May high, just about the same number of points it dropped during the 2011 break (although back then the ES was trading in the 1100-1300 range so the percentage drop this time is smaller). 

The market has dropped to a level which I think will be support and has done so in a mini-panic decline. I think we can expect these subsequent developments. First it is likely that the markets have begun a very wide trading range which will be bounded on the upside by the halfway retracement back to this year's high. This is about the 1985 level in the cash S&P. Within this range the averages are likely to swing up and down, putting in big moves without much rhyme or reason while traders adjust to the new price levels. I think today's early morning lows will hold for several weeks. If not they should not be broken by much.

I'd say that the odds are that the drop from this year's highs is over or nearly so. Of course, I may be wrong and this could be the start of a much bigger drop. But even then I doubt we will see anything worse than a 20% drop from the highs which would put the S&P at 1700 or so. If the S&P should drop that far I think we would see the Dow then at 14,000.