[Update 8:08PM: Here is an updated BPSPX, which is a good proxy for bullish sentiment. It works quite well in that respect as a stand alone indicator. It has finally moved back into a Minor 2 corrective target zone.]
The market is building a nice base channel. I also like Minor 3 down to below 800 by Halloween time or so.]
However I also theorize that when the market tries to achieve a true breakout from this level (11700) and escape the bearish marker created on the 20th May, it will have a violent reaction to the downside. In other words, we have a perfect setup for the larger Ending diagonal count here in that if a final thrust up occurs, the market will hit again be induced to sell off in a dramatic collapse and bearish price reversal.
Why the price collapse? Because that is the confirmation that the pattern is an ED pattern. All ED's suggest an exhaustion-type move which implies the market, once its "done" will collapse in price as all true ED's are wont to do.
This is equally perfect because the MM's left a big fat 6 point SPX gap open just below. Fill that with violence and the market is likely headed down in a nasty Minor 3 that will not be arrested. Dip buyers be damned!
Well thats the theory and the "setup." The puzzle pieces are set. Now we just need for the market to try something stupid and power up in a new high tomorrow in a final wave of the ED pattern. Short it with extreme prejudice is the answer. What the heck, its just another trade....
[Update 5:15PM: Very mature dollar correction. C now is 1.6 x A. 200 DMA has been hit. Lower channel line has been hit. Deep oversold and daily sentiment is practically worse than when it was at  in November 2009. Also time-wise "looks right".
Oh yeah and closed outside the lower BB.
Yeah yeah yeah, can go more oversold and all that, but soon, she's gonna bounce hard.]
Primary count is that the subminuette b wave of (v) of the ending diagonal is playing out. Then a small 5 wave move (or thrust if out of a triangle) to Minor 2 peak.
Remember if this is an ending diagonal triangle, the subdivisions are 3-3-3-3-3. So wave (v) would subdivide into likely a 5-3-5 zigzag. We had 5 waves up from the 1088 pivot to "a" and the theory is that the market experienced b wave weakness today.