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NEW YORK (TheStreet) -- With the S&P 500 breaking below Friday's low of 2,085.67 on Monday, the index gave us a strong indication that it wanted to drop even further to our secondary support level at 2,072. The question is: Will it go even lower than that, or should we expect it to bounce off support?

We analyze the market in terms of Elliott Wave theory, in which the market moves in five waves in the direction of a trend and three waves in a countertrend direction. In its current channel down, it appears the S&P 500 is in the third (and last) wave of a countertrend, or corrective, decline.

We believe this to be the case because this current downwave is weaker than the one that preceded it.

However, even though it is a corrective pullback, the market can continue lower and lower, until it provides evidence that it has finally turned. Clearly, we would need to see the market break out of the downtrend channel it has been in for the last four trading days. And, ideally, we want to see the market break out of that channel in an impulsive fashion -- with five waves off the low -- to signal that we are on our way to the 2,150 target box on our chart.

The other indication that we have been following is the McClellan Oscillator, which is now clearly at support. Ideally, we would want to see support held, and the market breaking out to the upside out of its current triangle pattern.

While the S&P 500 index should not break the 2,065-to-2,070 region of support, to remain bullish for at least one more high, the iShares Russell 2000 ETF (IWM) - Get Free Report has to remain quite bullish in its own right. Therefore, look for both the S&P 500 index and Russell 2000 ETF to break support before we suggest that we have finally topped.

See charts illustrating wave counts on the ES, INX, McClellan Oscillator, and IWM.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.