No surprise to anyone, the US indexes have entered a bear market which began in May.  The Alphahorn bull-bear indicator is solidly on a bear signal, having accurately called the  26 month bull market. In the more intermediate term, it’s been a crazy and very choppy market these past couple of weeks as the market has gyrated from lows to highs.  It fits the wave structure of a B wave, my primary count.  And, for those whose seem to focus solely on the SPX, it also fits the characteristic of the often problematic wave 4.  So, which is it?  I continue to believe that the better count is primary wave [B] of the bear market that began in May. I’m looking for this to form a complex corrective wave.  And, this week we should get some clarity on which count is correct. The transports will be my focus for the next couple of weeks.  As the chart above illustrates, it has been far cleaner and easier to count that the major indexes since the bear market began.  While, the majors seemed to have a failed or truncated 5th wave, the transports’ 5 wave structure off their high is text book perfect.  Since that first 5 wave move down, the transports have also traced out a nice abc zig zag that retraced 38.2% of the move down.  Now, if my big picture count is correct, then bear market is simply a wave 2 correction of the preceding 26 week bull market that will retrace 50-61.8% of that bull market and will not take out the March 2009 lows.  For my count to be correct it will be hard to believe that primary wave P[B] is already over.  It has been insufficient in both time and price.  Therefore, I’m looking for the current pull back to be wave (x) and will be followed by another three wave move up to the target of inverse head and shoulders.  The specific focus will be on the neckline on the possible inverse head and shoulders.  I’m looking for a gap up over it, but should it be rejected, then the alternative count for the transports is EXTREMELY BEARISH!!!! and I’ll be forced to rethink my bear market count.  Enjoy your labor day weekend