I don't have time to go into great detail but I wanted to post an update in response to the massive decline today. NYSE decliners outnumbered advancers by over 8 to 1 and over 90% of all the NYSE volume as to the downside. Weakness entered the market at the opening bell and was never alleviated, and the Nasdaq Comp did not confirm the highs of the indices, creating a bearish divergence that often accompanies major market tops.
Bottom line: I expect some further declines in the coming days, and I'm on high alert for signs that wave 3 is in fact underway. Right now, I'm only viewing this as a correction before new highs that take the S&P toward the 1100 area before wave 3 starts. One day of extreme weakness does not make a new trend or tell us much for the longer term. What happens in the next few days will tell us a whole lot more. If we have more days like today with similar weak NYSE internals within the next couple weeks then I will strongly place the wave 3 possibility on the forefront. But as of right now, it's just a temporary corrective pullback that should work lower in the coming days before one final rally.
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