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"Danger: Whipsaw Ahead" is the sign that we have been been putting over our charts once we began to expect a corrective move lower in the market. The issue with corrective moves is that the patterns are variable and unreliable yet point lower before they complete themselves.

What is still presenting as the greater likelihood is that as long as the S&P 500undefined remains below 2090, the next lower target is still 1995-2008. It is clear with Monday's action, however, that the market wanted to go higher and extend the "b-wave" in our Elliott Wave chart analysis.

We must note, however, that due to the 2.00 extension off the recent lows in the S&P 500 being exactly 2134, if the market were to take out the 2090 level, we would have to bring back the potential for the yellow wave count we took off the chart last week, which pointed to 2150.  

While we have viewed that potential as a much lower likelihood based upon last week's action, a breakout to more than 2090 would have to make us reconsider that potential. But, again, as it stands right now, we view this potential as less than 20%, especially as the market remains below 2090.

See charts illustrating the wave counts on the S&P 500.

This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.