Until yesterday the action since 1226 looked corrective. After today's big sell off though, we could count it motive, as a series of 1-2's and today as a third wave. As long as 1156ish holds this isn't my preferred count but I'll keep it in mind if prices keep going down the next few days.
A fourth wave usually retraces 23 to 38 % of wave three and into the territory of subwave four of three. This results in a target range for wave 4 of 1156 to 1196. Wave 2 took about three weeks to unfold, so if we expect a similar duration for wave 4 this puts us to the end of November. Lastly, waves two and four usually alternate. Since wave 2 was a simple zigzag wave 4 should unfold in a flat or a triangle (or a combination thereof).
So, even though we got a big down day today the rally from 1040 got retraced by less than 30 % so far, which is quite a common retrace for a fourth wave:
Below 1156ish another count is likely underway (a big flat since April 2010 probably).
