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(9/24/16)
I know I'm sounding like a broken record but the most likely
pattern developing from the February low is a Wedge type affair.
Meanwhile the VIX has reversed quickly back to the downside the past two weeks
and dropped below the 12 level this week. In order for a top to occur the
VIX will probably have to retest the low made in early August which was at 11
(point A). 
Meanwhile, although
it looks like Wave iv bottomed just over a week ago near 2120 and Wave v is
evolving with new highs to follow shortly, one possible alternative scenario is
that a more complex Wave iv is occurring. In this scenario the
previous low near 2120 would be retested which is now along the upward trend
line before Wave v occurs. If this is going to happen then some additional
selling would continue early next week.  Finally here is an
interesting chart from Bloomberg which shows 2016 GDP Growth Expectations versus
the S&P 500. Notice there has been a steady downward trend since the
Summer of 2015 in GDP Growth Expectations (red line). The S&P 500
caught up with the GDP Growth Expectations last December and January (point
B). However since then things have really gotten out of phase. Thus
one of two things is going to happen eventually. Either GDP Growth is
going to turn around and begin to rise substantially or the S&P 500 is going
to have a decent correction. 
Amateur Investors
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