S&P has its Friday's closing price lower than its Wednesday's closing price. Based on Dow Theory, when the high is lower than the previous high follows by a low that is lower than the previous low, the primary trend is down trend.
Both Dow and Nasdaq have their respective last high lower than their previous high but have yet to set a low lower than the previous low.
But I believe by next week both Dow and Nasdaq will confirm their primary down trend. Based on some technical indicators, the market is very likely to trend downwards as shown below.
The most likely outcome for Dow is a major wave (IV) correction as shown below.
There are other possible wave counts but I believe they are less likely.
If the current down trend can stop at X-X support level, the major wave (III) may have 9 waves instead of 5.
The scenario where Dow breaks both the X-X and Y-Y support levels is the worst that can happen. This is what some Wall Street's economists said, "W-shape recovery".
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