The first scenario is the bearish one (dark red) and it calls the high back on March 26th as the end of the rally and that we've started a corrective price pattern back to the downside with wave A down to the March 30th low (Monday's), wave B as this week's rally and now we need wave C down to the 760 area (the Fib projection at 759.58 is where wave C = 162% of wave A, which is also near the broken downtrend line from January). This A-B-C decline would create a larger-degree wave (a) as part of a larger corrective wave pattern to a new low below the March low. Clear as mud, I know. It simply means we're only at the start of what could be a very choppy decline to the new low but because it will be so choppy (corrective) we won't know whether it's a bullish pullback correction or part of a larger bearish pattern, hence testing each leg along the way.
SPX 60-min chart:
For the second scenario, labeled in light green, the pullback to the 760 area would be the completion of an A-B-C correction to the March rally but it would be considered as the end of a 2nd wave rather than part of a larger downward move. Bullishly, the rally to the March 26th high can be considered wave 1 of what will become a 5-wave advance to new highs later this month and into May (with an upside target well above 900 and possibly above 1000). The A-B-C pullback to 760 would therefore be labeled as wave 2 which I've done in light green.
The third scenario is the most immediately bullish and labeled in dark green. It says the smaller a-b-c correction from March 26th to March 30th is the 2nd wave correction and that we've already started the 3rd wave up. A new high from here, to complete a 5-wave advance from Monday's low would be the 1st wave of that larger degree 3rd wave (labeled wave (i)). That would be followed by another pullback to wave (ii) early next week and perhaps only to about 820. It would then continue higher from there later next week. This wave count is very bullish since the leg up later next week would be a 3rd of the larger 3rd wave and it would be a very strong rally. If it sets up this way you're going to want to be long the market and with size.
At this point I don't know which scenario is playing out and we just need to let price action play out further to provide more clues. But it will be one of them and it shouldn't take much longer to figure it out. In the meantime be careful and trade small.