Because of the major selloff below the mid-September lows on Wednesday (coupled with technical patterns as shown below), I now consider the intermediate term direction to have turned lower.
On the Three Peaks and a Domed House patterns that I have been monitoring, on the NDX/QQQ, it appears that the rising part of the pattern is complete. A description of Three Peaks and a Domed House can be found here: http://thepatternsite.com/3peaksdome.html
After point 23, an index usually drops back to its point 10 low. For the pattern labeled in white, that would be a drop of about 14% from current levels. Sometimes the market goes even lower.
From an Elliott Wave perspective, it appears that the NDX recently reached the top of Primary Wave 3 of the bull market from its November 2008 bear market low. On the chart below, Primary waves are labeled in blue.
On the Dow, it looks as if an expanded flat correction, big enough to be Primary degree, has been underway since January. The choppy upside movement ever since February is why I consider the February-September rally to be the B Wave of a flat rather than an impulse wave. The Dow appears to have formed a double zigzag rally.
The Dow will likely fall below it’s February low and find support in the vicinity of the 2013 lows in the mid-high 14000s.