Today seemed like the 5th wave conclusion of an impulse down starting 6/11/09. But at the close there was a surprise drop almost breaking to new lows. So it is likely that there has been no impulse down, or at least not a complete one.
My count is a double zigzag with the last (c) of [y] to be completed tomorrow completing a minor degree corrective wave (the dimension may be too large by one degree but that can be easily changed later). There are many possible counts for this in the greater primary 2 wave so I will post something on the matter when the market gives us more information. It is all speculation at this point but it seems to me that this is not the beginning of primary wave 3 but a correction in upward price action.
In addition we are very close to the 200 day moving average and may bounce off of it as a support area.
Although the corrective [x] wave is not incredibly important on a microscopic level it is interesting to see what may have happened. Note the expanding diagonal a wave then contracting ending diagonal c wave of (y). It seems odd to have these strung together and may not be possible but I do not see any rules prohibiting it. The abc could also be a wxy double zigzag. The a wave shown is a possibility, note that the 5th waves of both [3] and [5] are both truncated, again this may not be allowed but truncation would be the case even for a zigzag a wave as far as I can tell. I am unable to find any other options here without overlapping the red micro sub waves.
Also b of (y) was an expanding flat with its [A] flat's first wave making a new high, [B] never exceeded that high (c did however but only by .02!). Again odd but the alternative appears to be an expanding ending diagonal in [5] which is not allowed. It is interesting to study the market behavior on this level because it can raise important questions like these and can also give more information about future corrections within its respective impulse wave using the rule of alternation.
Alternatives:
It could be an extended 5th wave continuing tomorrow where we open finishing the 3rd of the 5th and complete the impulse down. But the 5th would be very large and just does not feel quite right to me.
We could have the 3rd wave of an impulse still being developed.
We may be heading up tomorrow with an impulse from the peak having been completed. The deep correction in this case is the wave 2 following a leading diagonal.
The whole pattern is wedging and Kenny posted an abc zigzag possibility with the [c] an ending diagonal. This may happen but I can count 5 waves in the selloff today as shown and the waves are not overlapping (overlapping may not be a requirement though). This pattern may play out but the [c] wave he shows is very large in time and distance compared to the [a] wave and it appears to be looking for another move lower.
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