We hit the nail on the head with this one (see previous blogs). The question today is where are we in the bigger scheme of things? The drop from the top of a large B-wave appears to be 5-waves. Normally, if there is such a thing nowadays, 5-waves define the direction of the main trend – in this case down – and completes the first leg (wave 1) which should then be retraced (wave 2). Typically waves 2 retrace a good part of wave 1 (62% or more) and go at least to the level of wave 4 of previous degree. Furthermore, this should take about 1/2 the time it took to go down! Therefore, even though wave a could be all of wave 2, it is after all a three-wave structure, it is highly unlikely to be complete as neither the distance or the time criterion have been met. Add to that that wave b is also a three wave structure, it is reasonable to assume that we are in a wave c, which must be a 5-wave structure and can easily reach the $21/$22 level or even higher. After that the outlook remains decidedly bearish!