Clearly the market was only in correction the previous few days, it was not the beginning of wave B. In fact wave A may continue for days more. Some possible counts are shown above.
The market continues to show confusing waves, but a leading or ending diagonal may have formed as shown on the top chart. This is a reasonable judgment considering the numerous overlapping waves; this forms a non-impulsive structure but with an upward direction. There are no impulsive looking waves since the bottom Friday. The ending diagonal count is labeled (the bearish count) with the bullish leading diagonal alternative count shown below. There are certainly other alternative counts, the count shown is essentially a guess.
To confirm the ending diagonal scenario, the market probably needed to break down some time ago. This is not happening however. There was an impulse looking wave from the 1001.78 top but it has been retraced heavily with 1001.78 being challenged. I favor a more bullish count at the moment, a leading diagonal may be correct. But honestly that count does not feel either. In any case there should be more of a pullback coming in the next hour or so. After the top today, an impulse was followed by zigzag looking waves. Some retracement values are shown.
All counts have serious problems. For example the previously marked wave [iv] flat last week was much wider than the current wave [iv] correction. But a bullish count with a leading diagonal would cause call for a huge [v] wave in an already overbought market, dwarfing wave [i]. Perhaps this upward push is the 'b' wave of a flat, but that wave count is also a hard sell. Time will tell.
The most likely may be an ending diagonal wave [v] that has been forming since 7/29/09 as shown on the second image. If so, the market may make one more high in the form of a zigzag pattern after correcting into the 990s.
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