We see a nice inverted cup and handle pattern which appears to be well underway, though with the 5 wave move off the base of the cup, I am somewhat skeptical that the handle is done. We should probably get a B and C - and with futures down in the early going, this seems to be well underway.
A precaution for bears - we do not yet have confirmation, and we still have not hit the 61.8% retracement (1324.07 log, 1326.19 linear). In addition, it's difficult to find a 4th wave for this move - though one could argue it happened "offscreen" during the weekend.
A precaution for bulls - yes, you may very well get your beloved and long-awaited QE3, but you will probably want more downside first. Bulls should really look for a break of at least the red line and preferably the recent high. The 61.8% retracement is 1363.87, and we could reasonably reach that in the next day or two.
