Elliott Wave Update ~ 15 May 2012 [Update 6:52PM]

Update 6:52PM: Update on the Gallup Presidential approval chart.  Still inside the up channel but diverging with 2011's high. Keeping an eye on that red up channel. Corrected at 6:56PM: Had initially uploaded the wrong chart.

ORIGINAL POST
If we consider the April 2nd peak in the Wilshire 5000 to be the proper Primary wave [2] top - and there is no good reason not to - then the market could very well be working its way lower and setting itself up for a panic "third of a third" wave down of some degree. For the purposes of the charts below, we'll call it a Minute wave [iii] down. (the circled green)

Here is the most bearish count and supposes that the market is soon approaching that point.

Here is a variation on the same theme in case there is a surprise liquidity-pumping move by a Central Bank. This allows for a 50% retrace of the May counter rally high and a final backtest of the broken neckline. This count would align better with the DJIA (not shown) wave count which topped in fact on the May rebound high.

CONCLUSION:
As stated last night, price action is definitely skewing to the bearish side of the counts and expecting any kind of major bounce might be wishful thinking. So in this case the top Wilshire chart may be the one to watch.  The reason is we have yet to have that "point of recognition moment" in this decline.  That can only mean we have not yet had a "third of a third" wave down. But the waves and price action indicate it may be approaching.

Yet if there is a liquidity pump like a QE3 announcement which I do not expect by the way (because they will only do that after a full-fledged panic), the count allows for a somewhat robust bounce to alleviate and head fake the market. That is where some variation of the second Wilshire chart comes into play.

Yet no matter the short term variations, both charts still imply that the market is in a larger Minute wave [iii] down and ultimately if this is true, the power of wave [iii] will take the market much much lower.