Chart Study from the Dragons Den. There will be a few charts coming up over the next while to show what appears to be likely near term and what might be possible going out a little further.
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2/ We can always have a big picture concept in mind but as the interior patterns evolve, you have to evolve with them on how that overall path unfolds. Nothing goes in a straight line. Listen to what the market is telling you and not what you want to see.
3/ Previously from the Dec 26th low, it was suspected a corrective up will unfold and we are seeing that. First, we followed the 2008 model that was a zigzag pattern up. Then it looked like a 5 wave wedge was forming. However, I think a slight change makes an even better fit.
4/ After looking at a number of other sectors to cross correlate and re-evaluating the overall look with the underlying indicators a cross time frames, I believe the zigzag is more true but in slightly larger form now, especially since we broke higher Friday.
5/ As a general outline, this is the zigzag being developed. We'll break it down in the next one. 
6/ Here's the breakdown of the move so far as it best fits with my indicators now.
7/ As such, the zigzag is now still the best fit as an ABC - X - ABC pattern where the X is another ABC. (X can be a single straight move OR another ABC)
8/ Remember, ABC - X - ABC patterns in themselves are pretty much always corrective and will typically get completely retraced. The left side of a domed house (3 peaks domed house pattern) as a general pattern is one example. The last drop as a real example was another.
9/ Given all that, here is one possible short term path.
10/ And yet, a slightly different alternative can also unfold. This would be an even larger 5 wave wedge. How we move in the next few days and how my indicators validate each smaller segment will be key.
11/ The last 2 models are currently the best fit and regardless of path, 2 things are very high probability. 1) Upside should be limited to under 2600. 2) once we complete, very likely we retrace everything since Dec 26th to at least retest lows.
12/ The 5 wave wedge would be the most bearish outcome and at a minimum, we repeat the 450 drop from 2800-2350 to target around 2100. However, it is more likely it gets extended and we target closer to 1800. Note drop from 2800 was a zigzag and 2nd part extended.
13/ The Zigzag pattern is least bearish but only in terms of time. It may simply mean a larger corrective is forming and the ABC-X-ABC zigzag is only wave A of an ABC. The B would retrace, then C make a lower high before we plummet.
14/ If I look at my higher time frames like the daily, my indicators actually favor the larger ABC for now. This actually would still fit the 2008 model because this ABC is wave 4 in channel and the next drop while making a new low (2100?) would be divergent/terminal.
15/ If we place the current chart against the long term 2008 it still fits very well. That drop was a giant C wave and this one is even larger but should still be C wave down in character.
16/ And remember the even bigger picture? The ABC - X - ABC off the 2016 lows? Yeah, it's all getting retraced in time. We won't be seeing new all time highs for a LONG time. Count on it.
17/ And finally, here is the index put against the 3 peaks domed house pattern. THIS IS TEXTBOOK. Ok, that's all for now. There are longer implications as well in that ultimately, the S&P should retrace EVERYTHING from the 2009 low but we'll cover that at a later time.
