No new low on the overnight minis, not even quite a tie. Now we have a rebound. So the down move counts as a "three".
I've exhaustively stated the case for upside over the main downtrend line - [c] wave of a Minor 2 up off a Minor 1 leading diagonal low of 1010 SPX . One final quick review of the main points for [c] of 2 up (target above 1099):
1. VIX may need to challenge its big gap up - that would likely take a break over the main trendline for the VIX to get solidly under 23
2. Dollar/Euro may need further wave (2) correcting - Dollar getting close to a bottom. However Euro lacks a healthy wave (2) up.
3. Sentiment at best is merely neutral - would be better if it was strengthened first. Higher prices will do that.
4. EWI is consistently bearish.
5. The big leading diagonal count works well in my opinion here and the structure requires a solid [c] wave of Minor 2 up to complete.
6. NYAD cumulative chart may be leading prices up.
7. Sellers have been shaken out for now. See hourly downsloping line on this NYAD indicator on this NASDAQ chart. http://3.bp.blogspot.com/_TwUS3GyHKsQ/TEd85UJYqNI/AAAAAAAAGhE/xnanj2Tw0Bc/s1600/comp.png Not that they won't be back in a big way soon enough.
The main points against a recovery high above 1099 and a massive failure in prices:
1. 10 day CPC is getting fairly low and started to curl up - (but might need more down) http://1.bp.blogspot.com/_TwUS3GyHKsQ/TEeQxKin0UI/AAAAAAAAGhk/280jrbO_wuI/s1600/cpc.png
2. Fear and sentiment have corrected enough - consolidated enough - to allow a move down.
3. EWI is consistently bearish.
Things are coming to a head and now we await. To confuse things we could have 5 waves down from 1099 to 1056 and 5 waves up from 1056 to 1088 - now we have "almost" 5 down on the minis - but not quite - and now rebound overlap.
Does it ever get easy?
What would be ideal for the wave structure in my opinion? A big break over the main downtrend line and a break over 1099 in a [c] of Minor 2 and VIX to challenge its big gap up.
Enough words for now. The table has been set. I won't be able to post until later tonight.
Futures seems to point toward a (iii) of [c] coming....it will be a ridiculous gap up at this rate...they don't seem to be done yet with challenging that main downtrend line.