Although not invalidated, the gap lower this morning makes an incomplete wave [v] top (as suggested in yesterday's update) a stretch. At the same time the market retraced more than 61.8% of today's drop, so this is probably more than a second wave correction unless prices quickly snap lower.
The best view is a completing second wave flat (call it an subminuette degree wave until the degrees are more certain) that began at yesterday's morning low. Because of the choppiness in the bounce today, the [C] wave of this flat is likely an ending diagonal with wave (2) completing or wave (3) underway. [C] should complete tomorrow or Monday near the 1219 area if this count is correct.
If the short term count is not correct, prices should open low in a resuming down trend that quickly breaks under 1204. A move like this should be the core of the first incomplete impulse from the top. The bounce today will then be labeled a flat+zigzag double.
Keep in mind that the trend is now likely down, so downside surprise is more likely than upside surprise. There will always be a count to justify large drops.
With good symmetry, wave (Z) should be a complete zigzag. Prices should break under the channel above next week when some stronger selling begins to enter the market. Momentum should be turning lower at this time.
After waiting for the rally to complete for several weeks, a complete rally from March 2009 can now be counted with a large double top in place.
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