The SP500 opened below and then closed solidly above strong support at the August 2010 swing high of 1129.24 with a low today of 1101.54 just 10.04 points above the 2010 S1 pivot of 1091.50. The conclusion is that wave 3 of (C) is done and wave 4 of (C) is in progress.
One "fly in the ointment" for this view is that after building the potential for an upside breakout over several months, the Dollar turned down sharply this afternoon and looks ready to retest the May 2011 low. The market has gyrated over the last 4 weeks almost perfectly in an inverse manner to the Dollar. Thus, a retest of the low in the Dollar may provide significant support to the market and prevent a retest of today's stock market low near term.
If the SP500 can move back and sustain above 1200, we may conclude that the decline is over, but we won't know for several days and perhaps weeks. One thing is for sure, I would be very cautious about a follow-through day that occurs 3 days from now.