NDX:watch the 2268.30 level
Initial confirmation of a meaningful top in NDX (either minor wave 3 (more likley) or minor wave 5) is likely at the BOY high of 2268.30 as indicated in Chart 1. Note that 2268.30 is 2.72% below the recent high and 1.52% below today's close.
Today's better-than-1% decline leaves us with two competing tracking counts.
The red count calls for a top being in place. If so, other indexes probably have topped as well - either as the top or a meaningful interim top. See Hope Rally Ends Here (Jan 2011 attempt) (1/14/11) for additional discussions.
The green count sees an expanded flat for [4] of iii and thus sees today's decline as wave iv of (v) of [v]. There are a number of things going for this count.
a- Wave [4] of iii alternates with wave [2] of iii.
b- Wave iii channels well as indicated by the green channel lines.
c- The decline from the recent high counts as a (potentially incomplete) zigzag so far (Chart 2), possibly wave [A] of a triangle iv or the entire wave iv.
d- Today's low came at the lower boundary of the wave (v) trend channel as indicated by the blue trend line.
A decline below 2268.30, the top of wave i of (v), will reject the green count and confirm a meaningful top. The same can be said about COMPQ.
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The blue count sees a top. Or is wave [v] extending based on the gray count? Breaching the BOY high as well as the blue [iv] low is important to eliminating this bullish potential.
The green count sees today's decline as wave [iv] of 5. Note that today's low also rests on the lower boundary of the trend channel for minor wave 5 if the green count is playing out.
INDU:
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The blue and red counts see the top being in place. The green count warns of an incomplete ED in the Dow (Chart 4 and Chart 5). If the incomplete ED played out, it would meaningfully tilt the odds towards the bullish counts discussed above.
Moreover, the squiggle count (right Chart 6) shows a distinctively corrective decline (so far) in the Dow.
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These counts (Chart 7) on the RUT are inspired by Matt's comment in the comment section. The red count sees a top in place. The green count has wave (iv) being an expanded flat (or a triangle?), which would alternate with the zigzag wave (ii). Today's low comes close to the mid-channel line based on the green count.
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[Overnight update]
Squiggle counts discussed yesterday are still tracking, with an ED possible on senior indexes.