SPX retraced .891% back from 878 to 930 peak. 90% is the rule. So....I'd call it a minimum requirement for a flat. The DOW was actually 100% retrace and the NASDAQ above 90%. So there is no divergence between the 3.
There is an obvious, what appears a clearcut ABC zig zag down from peak today. That implies a move back up to finish the B wave at a higher spot. It could happen of course but support at 896-900 must hold. But I think the zig zag is a false pattern likely to be only a part of a bigger down pattern. Maybe I'm wrong, we'll see tomorrow.
What makes me think the up move is over: 1) clear shooting star on The SPX 2) Big volume today producing that candle 3) Flat minimums were met (DOW WAS 100%) and I count a valid ABC from 878. 4) Banks checked out early yesterday and diverged from the SPX today. http://danericselliottwaves.blogspot.com/2009/05/divergence-between-s-and-banks.html
5) DOW made a new high today and had big time negative RSI divergence.
So I'm trying to keep this simple and not lose sight of the forest. If it heads up again tomorrow, then it will have overrun a big fat shooting star with volume. So be it. Then I'll be wrong.
There will no doubt be more bouncing a bit between 875 and wherever. However the bears slapped the market down in good fashion today after a 15:1 open advance/decline volume ratio at 10:15 A.M. they managed to close the market red with a final advance/decline line down to .96....under 1.
B of [X] (or whatver it turns out to be) wave appears to be over. Bulls must hold support near 900 to get another crack above.