[Update 5:08PM: The dollar sentiment is low. The wave structure looks nice as it is. The Euro has now corrected some 44.5% which is a more respectable wave (2). However again, the Euro would look better nearer 50% corrective.
Despite the nice wave structure, no firm turn yet on the dollar. ]
This psychological stance is a decidedly a bear market stance and it occurs frequently on wave two's of all sizes right up until the main point of recognition occurs. That point is still further down the road at a lower price level. However can the Fed save the markets? Of course not! QE2 will be a disaster if they execute it. Sure the market may have one final short-squeeze spasm, but once the buyers wane, I expect a flash crash event.
They would be fools to do it.
There seems to be elements again of both an ending diagonal triangle at play (pushing the market and getting weaker as it goes up) and a double zigzag (first zigzag did not hit an adequate retrace price so it will double its form to achieve it). Both of these elements are tied to sentiment of course. A pesky up market will turn bears into neutral and those who look to be bullish to do so.
7 waves up is a corrective pattern. Looking objectively we have 5 overlapping up from the 1010 SPX low.
It would look better to have that final wave. I like 1132 SPX peak which is .618(c) x (a), a squeak just above 1131, as today's pullback allowed a lower upper target.
The 1102-1107 gap was bought today and was the natural "dip buy" spot. A closing of the gap represents a potential big reversal and confirms Minor 2 high is in.