Above is a 1 minute chart of the Dow Jones Industrial Average. There was a rally today at the opening bell. The Fed statement came out today at 2:15 pm EST and prices fell before a final rally ensued. Prices fell dramatically after that in what appears to be an impulse wave still underway.
An impulsive wave appears to have formed since yesterday that is about twice the length of a possible leading diagonal seen 11/2/09. Because this diagonal was overlapped today on the Dow, it appears that these waves formed a zigzag correction, probably wave [ii] within primary wave [3] that began just a few weeks ago. If [ii] is not complete, look for a double zigzag, a double, or a flat to unfold. For now, the weakness in prices is probably the beginning of wave [iii] down, a "point of recognition" that should bring prices well into the 900s on the S&P 500. The S&P 500 closed at 1046.50 today. A decline like this will be healthy for the market because it has been so overbought in the longer term.
The declining wave near the close today looks like an impulse that is completing its 4th wave. If that impulse is completed and a bounce follows, I would be looking at the wave structure within the next wave down that should follow. If it is weak, it may be a zigzag down or just the first wave of a larger impulse.
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