I've labeled subwaves i through v. The complete drop from Wednesday's high of 1208.47 to yesterday's low of 1121.09 (narrowly beating out Friday's 1122.05) covered 87.38 points. Today's closing high of 1162.35 is within 2 1/2 points of the 50% retracement of the entire impulse.
(Note my typo in the chart. The wave label at the bottom of the channel should be v, not iv.)
A new channel is trending up at the moment. Coincidentally, the 50% retracement at 1164.78 is right in the middle of a support-resistance band I noted back on the 12th. It seems the 1120-1130 support-resistance band from the 8/12 chart might also be in play.
Despite the tidy trend channel containing subwaves iv and v, the actual charted values are a bit of a mess. Regardless, the subwave 5 bottom is in, and the corrective wave might be close to over. If not, the next potential top would be at 1175, the 61.8% retracement. This is also the failed support level from last Thursday morning. Curiouser and curiouser.
Remember, this is all part of the development of wave 5 down from the 7/07 top. A rise above the subwave i low of 1184 calls this wave counting into question; and if 1208 is topped, it all goes out the window.
Update: S&P Equity research chief investment strategist Sam Stovall offers a very bearish assessment.