Orginally I was expecting that move to unfold gradually like it did in `04.
However the recent price action is suggesting that the market is going to diverge from the `04 scenario and correct quickly with a very sharp move lower. While scary the whole correction should run it's course quickly. My guess is that this should be over within a week or less.
If historical precedent holds the market should correct to at least the 1035 level before the third leg begins.
I expect any move to that level will have the Fed freaking out. That should get the printing presses running full blast again. You know what that is going to be good for :)