On the left is the weekly close chart of the Nasdaq (No noise, no nonsense) which clearly shows 5 waves down hitting precise Fib retracement levels. These 5 waves are the primary A wave of a Cycle wave 4. (Look at my long term view published some time ago). On the right is a daily bar chart of the recent market drop. 5 waves are clearly identifiable, indicating that we are in an intermediate B wave of the Primary B wave. There may still be a little bit of suffering before this Minute wave 5 of Minor A is over. If you are a dip buyer, this is your moment, also risk/reward is extremely high on the bullish front. More conservative traders should wait for 3 consecutive bullish days. The markets climb walls of worry and quite frankly the inflation number didn't seem so bad to me if you discount the unrealistic expectations that were rumored. Must be said though, that Bonds are signaling possible rate cuts this year and the Eurodollar yield spread says the Fed is going to make a big mistake in the third quarter.
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A close below the 85% retracement, doesn't invalidate the count, but signals it is in serious jeopardy. More often than not, it leads to new lows.