First, you can see that this structure does not look complete. And you may remember NQ, RTY and TVIX all do not look like complete five wave structures.
Second, the huge question is whether that drop off the May 1st top is all of wave 4 down or only the first leg down in wave A of 4.
I have several reasons to argue it was only wave A of 4:
– it tagged a minimum 23.6% retrecement fib but that is a typical fib for wave A, not for the whole wave 4 down;
– it tagged a low of wave ( b ) of ( v ) – atypical target for wave A of 4;
– a typical target for wave 4 is the low of preceding wave ( iv ) down of a lower degree (272.42).
Now, if we assume it was indeed only the first leg down in wave A of 4 down the next question is how high that corrective rally in wave B up may go.
First, we should expect some (a)-(b)-(c) corrective structure pointing up, which we do have..
Second, because wave B up is a corrective wave, it reacts to preceding drop in wave A down. That is why our main instrument is retracement fibs applied to the preceding drop.
This is how those retracement levels look like (red lines with red labels in the right part of the screen):