A 1 minute chart covering the last 2 days is shown above. Given the rally today, a correction did end during the previous day of trading, Thursday 12/31/09. But today's trading began with a gap. When an upward gap is present with no rally preceding it near the close of the previous day's trading, it is the sign of a corrective wave upwards unfolding, not that of impulsive waves higher. So that basically leaves two options when describing the rally today: part of a 'b' wave or part of the 1st, 3rd, or 5th waves of an ending diagonal. "Part" is said because the sideways prices for most of the day indicate higher prices are likely ahead.
A 15 minute chart is shown above. Notice the wedging seen here. It is even more apparent in the 15 minute chart below of the Dow Jones Industrial Average. This ending diagonal count is listed above as an alternative on the S&P 500, but it looks better the more I look at it. On the other hand, third waves should be shorter than 1st waves in ending diagonals. So perhaps this ending diagonal is still completing its third wave. If neither of these possibilities play out, some other impulsive count is.
Regardless of the larger pattern, I feel confident that there will be one more high tomorrow before prices pull back. The pullback could be one of many things, but should be that of the 'c' wave of a triangle or flat, a corrective zigzag 4th wave of a larger ending diagonal, or the beginning of primary wave [3]. It will depend on the magnitude and wave pattern as prices move lower.
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