In the last update, three wave counts with about equal probabilities were presented. The market action this week has helped clarify the situation somewhat, but there is still no high probability choice among these three.
An incomplete wave [4] has been looking worse day by day because of the market's height above [3], [4]'s anticipated size in relation to [2], and [4]'s complexity. The ending diagonal option still seems strange because of the small size of its 3rd wave in relation to its 1st wave and the great subdivision of its 3rd wave relative to the other waves, in particular the 5th. The rally since the October low (the 5th wave of the ending diagonal option) resembles an impulse more than a zigzag or double zigzag. If it is a zigzag family pattern, its 'b' or 'x' wave is basically invisible on the daily chart which is not the case of the 'b' waves of the 1st and 2nd legs of the ending diagonal option.
The impulsive wave [5] primary count has a deep wave (2) of [5] which is not common for 2nd waves. There is also not much clearance between the top of (1) and (3)'s high suggesting a possible overlap in the future. If (4) is a sideways, shallow wave, there will be no overlap problem and this wave count remains the most simple of the options presented. Supporting this is today's short-term action today after today's all-time high (including the 2:00pm EST Federal Reserve statement). It has a corrective look which suggests a rally of some degree is still underway.
The October rally may be an incomplete impulse wave or an incomplete zigzag-family wave. Because today's correction looks fairly large in relation to the other corrections in the wave, the chances that the October rally wave is incomplete will grow worse if the market continues to decline.
There are two very clear impulse waves lower following today's high. But notice the size of (b) in relation to the rally following the day's low. The rally following the day's low is so much larger than (b) that it looks more like the start of a bullish impulse wave or an 'x' wave than a second wave. If the market does break under today's low tomorrow, making the October rally wave look complete, the alternate wave counts mentioned above are still worth considering. But a break of 1740 and then 1730 are still required to significantly raise the probabilities of the alternate counts.
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