[Update 4:55PM: The RUT has only 7 waves down from a distinct price peak. So far the waves have been overlapping except the last which finally broke under October support. The RUT is the chart that leads me to believe (as I suggested in last night's post) that there is more selling left to be done before we achieve any kind of oversold bounce or a wave [ii].
Here is the hourly on the RUT. Now people may be finally getting that "hrmmm, maybe I should cut back on the small caps a bit" feeling. The RSI just entered oversold and the waves are only 7 down and all have overlapped so far. So that suggest that there is more selling to be done on the RUT and hence the overall market.
The speed and ferocity of this initial drop is a stunningly beautiful impulse wave in development on many indexes. This is evidence that the trend has changed and that the primary trend (cycle degree actually) is down and has reasserted itself just like we said it would. There is even a difference between the impulses now versus the big corrections of July 2009 and late October. These are purer.
There are many ways to count this, and I am not even sure I have the correct degree but here is one taste. In any event, I still show the market inside an initial wave (iii) down and it may be getting close to finding support for a 4th wave to occur. Then after a Minute (iv) corrective up, a slower wave (v) down should occur and eventually we are seeking the bottom of Minute wave [i] as best as I can tell.
There are no positive divergences on anything to suggest that we are ready for a rebound wave. the hourly RSI's and ROC show bear mode.