Odds favor higher highs - i.e. minor wave 2-up is yet to finish.
However, Chart 1 reveals that today is the 5th day of the latest advance. From a time perspective, the longer the market stretches on, the more the ED structure is at risk at this juncture.
While the ED is still a valid count at the moment, it's prudent now to consider other wave structures minor wave 2-up as a hedge. For example, minor wave 2-up could be a [w]-[x]-[y] double three with [y] being a double zigzag (as illustrated by the Blue Labels in Chart 2). If this is the case, minor wave 2 can retrace (a lot ?) higher than the cap on the ED.
On the squiggle front, Chart 3 highlights the top scenarios which include one that says the market has topped (alt in Red) - works well with the time factor though.
The purple labeled count is the top pick. The low just before the close is either all of [E] of b or (A) of [E] of b.
Near term headwind for the USD index -
The USD index (Chart 3) is not ready to turn just yet. If one steps away from the USD index and examines its largest component (USD.EUR), one finds that USD.EUR is most likely tracing out a fourth wave of certain degree. There's likely one more advance and possibly two before a turn (Chart 4). So are currencies in sync with stocks?
From a larger picture perspective, there's no USD index P3-up if there's no Euro P3-down. This is obvious by the currency weights assigned to the USD index.
Euro = 57.6% Canadian Dollar = 9.1%
Japanese Yen = 13.6% Sweden Krona = 4.2%
British Pound = 11.9% Swiss Franc = 3.6%
I have also a discussion about this in The Forest and the Trees (7/16/10) - see the section titled The forest - long term cross-asset musings.