The market continued lower today before a bounce that looks like a clear zigzag. One possible labeling of the recent action can be seen above. There is good symmetry with this count but wave (3) is questionable.
For the upward zigzag corrective wave to be validated, prices must move lower tomorrow and then proceed to take out today's low. An incomplete double zigzag correction is also a possibility but the count will likely be invalidated if there is a move above 1287.5.
At this early stage, the market is behaving as expected following an assumed 1/18/11 significant top. On the 30 minute scale, the pullback since 1/18 looks like a single wave and should be followed by at least another to form a zigzag.
The middle Bollinger band was reached today and it appears to have acted as resistance. On the daily scale, there has been almost no downward action since the top. The market needs to show that the downward move is a genuine move in a new bear market, otherwise the trend will still be generally higher. Considering market internals however, the probability is for at least a temporary trend reversal.
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