Last few trading sessions might be volatile but Dow was able to stay within the wedge as shown above. So the two possibilities remained intact.
It is either mega wave B has ended. Major wave (iii) has only 5 waves as shown below,
OR the major wave (iii) has 9 waves as shown below.
As both the possibilities are pointing towards the ending of the wave B's run since March 2009, I will definitely stay clear of the market, holding on to my cash, wait for the mega wave C to unfold or until the market proved me wrong.
Some investment houses at this moment remained bullish, quoting improved earnings, job figures and others figures to support the bullish views. But I would prefer to take these good figures of the past few months as the reason why Dow can reach its current level of above 12,000. The good figures have already been factored into the Dow.
Since the stock market is always ahead of the economy by 6 months, it is always the case that Dow usually declines ahead of poor economic figures or a recession when reports are still saying the economy is doing great. Frankly speaking, so far Dow has not shown any sign of decline until this very moment, see figure below
But my wave count has pointed to the completion of wave 5 of the major wave (iii) of mega wave B. Since this location can be a possible ending point ( great probability), I would prefer to hold cash instead of stocks. Even if (iii) is extended, the extension within the contracting wedge is going to be short and you have to watch out for failure (iii), the risk is going to be high.
Looking at the following headlines, it is safer for me to stay away from the market for a while.
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