[630PM] Futures sold off in the after hours the close, offering the missing small degree -down to complete iii-down (or C). The sell-off occurred when Prechter was being interviewed by Bloomberg.
[4PM] The overnight sharp reversal down in stocks, the breaking of key trend lines from the July low, and the breach of a couple of key levels in several indexes most likely indicate that minor wave 2-up of (1)-down of P3-down (or wave B-up under a bullish count) is complete. The next leg of sell-off to fresh lows of 2010 has begun hours after the Fed QE2-light announcement. See Chart 1.
The notable reversal up in the US dollar index offers support of this bearish count (Chart 2).
The July 30th low been breached in WLSH, RUT, COMPQ, but not yet in SPX, DJ, and NDX.
Could the pullback be a bear trap. Yes. We do not have confirmation of minor 3-down yet. The decline so far is a zigzag. And the market is near term somewhat oversold. (However, if this is indeed the powerful minor wave 3-down, the market will offer confirmation very quickly. )
In terms of a near term bear trap, it's possible that the sell-off is the end of an [x] wave of a triple-three minor 2-up (see Chart 3). Note that the proposed triple-three structure is an overlapping one, which in my mind is more credible than an non-0verlapping one. The July 20th low (1956.88 in SPX) is the next key level for the bullish count.
Chart 4 offers a squiggle count of the decline from yesterday's high - this would be a third wave down under the bearish count or a C wave down under the bullish count.