If we are in a new downtrend, the recent moves to the upside may be merely correcting earlier moves down. A common corrective pattern is an ABC pattern where the first leg is steeper than the third leg. And that looks to be what is unfolding now. It appears we have completed the first and second moves and are in the midst of the third.
A good target is the overhead gap formed from the 10th to the 11th (red line). That would make leg "C" of the correction 61.8% the length of leg "A," so having both the fib extension and gap at the same spot seems ideal.
A good target is the overhead gap formed from the 10th to the 11th (red line). That would make leg "C" of the correction 61.8% the length of leg "A," so having both the fib extension and gap at the same spot seems ideal.