Market Timing Update (5/4/10 Close)

*** Just a correction? ***
The entire decline remains likely to be the final correction within P2. But if
[1] SPX drops below 1113.89, which will make the decline larger than the Jan-Feb correction, OR
[2] A large and clear wave structure develops that strongly suggests additional declines below 1113.89,
it will seriously challenge this minor degree bullish view. A drop below the 2/5/10 low (1044.50 in SPX) will outright invalidate this minor degree bullish view.

Chart 1 (SPX) and Chart 2 (RUT) present the corresponding wave counts and offer projections on how this correction may play out from a wave structure perspective.

Important EW hints on identifying the low under this interpretation:
The blue labeled count is the preferred count, which calls for a five wave decline from what is labeled as wave [b]. The market still has (iv)-up and (v)-down left on the minuette degree.

The red labeled count is the alt count (within the context of a general triple-three count of P2). This scenario only requires a three wave decline from what is labeled as wave [x] (or wave [b] for the blue labeled count). The low may be in or the market still has the iv-up and v-down left on the subminuette degree. See Chart 4 below for a squiggle count.

***Topped, a primary degree decline is starting? ***
The wave count in case that the market has topped is straight forward (Chart 3). Chart 4 offers a squiggle count of today's decline. A small degree fourth wave is most likely in progress.