The rationale is that:
- An expanding 'b' wave triangle is evident within wave (ii), suggesting completion of wave (ii) was imminent.
- The decline today retraced wave 'c' in less time than it took to develop - a key indicator that strongly suggests the next leg down is underway.
Some of the rationale behind this is that the Resource sector (XMJ) has retraced only just over 23.2% of the decline. Whilst this is perfectly acceptable, there's a chance that additional corrective action could unfold (eg a double zig-zag).