Thursday 5/17/12 Market Update

There are many ways to describe the wave action near the last recovery high and the sell-off since that time.  Thinning the options down, the primary count and the "or" option illustrated in the charts here are the best counts in my opinion.

Two things stand out to me in the chart above.  The non-impulsive nature of the April-May rally and the non-impulsive nature of the first April decline.  While it is possible to label these waves as impulses, this is breaking guidelines and going against what is natural.  If even one of these two structures are 3-wave patterns, there cannot be a complete top at the last recovery high.

There may be a continuation lower for days and possibly weeks more.  The market is quite oversold, so the primary count above still seems to be worth considering.  An extended wave [v] seen this week makes sense in the current position, but waves [ii] and [iv] are a bit strange.