As the count yesterday suggested, the market appears to have topped today completing an ending diagonal [v] of A wave. Given the previous overlapping, drifting zigzag waves with a series of trendlines being broken on the downside today eliminating wedging on a larger scale, this is a reasonable conclusion.
There was an impulse wave down today (although it can be counted as a zigzag) with an unclear structure following. The best count is some type of zigzag pattern forming with a 'b' wave expanding flat in progress. In the morning hours, the market should rise above 1000, probably around 1002, if this flat is truly playing out.
It is possible this was wave 1 of a larger impulse, not the first wave of a zigzag, but the correction looks very wide which would work better as a 'b' wave than as a second wave. This is a more powerful pattern and given the market conditions, this should not be ruled out as a possibility.
There is little market breadth with clear divergence on many technical indicators. Wave [v] was extended with an ending diagonal completing the wave, another bearish signal. So I was surprised today to see an impulse followed by indecisive waves, probably a zigzag pattern forming as mentioned above. A single zigzag alone on this scale would retrace very little. A double zigzag may eventually unfold retracing more ground, but that would basically put a limit the correction. Of course this zigzag correction that appears to be developing may be the 'a' wave of a larger correction, which is very likely the case given the size of wave A, but the same bound would apply. Wave B should take at least one week to complete.
If a zigzag pattern really is developing from the highs, it is proof that the rally is not yet over, that the correction is consolidation for a move higher.
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