While stocks have pretty much followed the (near term bullish) primary count (Chart 1, blue) presented in Stocks VIX and DX (4/15/11), this week’s volatility has presented ample concerns to warrant a closer look at a (near term bearish) competing scenario.
The particular near term bullish primary count in Stocks, VIX and DX (4/15/11) describes the decline from the April high as a second wave. Furthermore, if the proposed second wave decline did not end during the week ending 4/15/11, SPX would find support around 1294.
Indeed, the low in SPX before the strong recovery to 1337.49 this past week was 1294.70 on 4/18/11 (Chart 1).
However, there are concerns …
 There’s a great amount of unevenness/non-confirmation across indexes. INDU made a new recovery high, while other indexes lagged, some significantly (e.g., SP400 and Russell 2000).
 The upward gap at the open this past Wednesday is the largest one since the March 2009 low, if we exclude the one following the flash crash (Chart 2). It may be unusual to see such a large gap at such a late stage of the rally (i.e. [iii]-up of 5-up of the blue count in Chart 1).
 The current advance represents a fresh attempt to conquer the decade low resistance zone after a failed attempt in February (Chart 3). The resistance zone has yet to turn into a support zone for the market.
 At this critical juncture, negative divergence between price and technical indicators is now apparent on the daily time frame (Chart 1).
 At the same time, risk premium has shrunk to record levels with VIX collapsing to fresh lows during the entire hope rally (Chart 4).
… that warrant a closer look at another count of the hope rally which turns near term bearish. See the red count in Chart 5.