A-B was a move from 87-67,(870-866 on the SPX) a 20 point move. This gives us the A-B leg.
B-C: needs to be a retracement of the A-B leg of either 62% or 78%. From 67 we move to 80. Which is just about a 62.8% retracement, which validates the B-C leg.
C-D: The C-D leg, must then equal A-B which is another 20 point move. This will take us from 80-60(800-600) on SPX).
One danger of this pattern is the possibility of the D leg being extended. This would be a 127% or 168% Retracement of the B-C leg. This would take the SPY to 50 and 47, respectively.
I like this pattern the most, for two reasons. If the market follows this pattern, we have another leg down. Secondly, it's technically bullish pattern once it is completed. So if this is completed, it will be safe to get long around 600. As long as we don't extend the D leg.
