The above chart is of the S&P over the past two days on the 3 minute chart level. You can see 2 clear 5 wave rallies which I labeled. Also, NYSE breadth has flipped to be just as strong on the upside as it was weak on the downside two days ago. Demand to buy stocks is back, and there are 2 impulsive rallies to support that. It is possible to count those two five wave rallies as an A wave and a C wave in a zigzag correction. But it should be a correction from a 5 wave decline. I don't see a five wave decline occuring prior to that, I see a three wave decline. As has been the case over the past few weeks, the market has been on crack and forming impulse waves both up and down. But with all that said, the rallies are becoming harder to sustain, bearish divergence is building on the daily charts, and the rally off the lows last month is choppy. So I have no doubt this is a correction to the upside and the larger trend is still down. But as we can see, trying to count corrections are very difficult. The best thing I can do is protect myself from huge rallies, and just watch and wait...........patiently.
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