The worst of "The Great Deflation" is still in the future. In the long term, we are on track to continue downwards in "The Great Deflation" until the low point of Supercycle wave (a) is reached in 2021. Currently, there is still a great deal of exuberant optimism, made even more evident with Minor wave 2 up (within the much larger Primary wave  down that is unfolding from 2011 - 2016) still unfolding. A case of point in the continued exuberant optimism with an analyst recently calling for Dow 100,000 by 2030 on CNBC.
On the short to intermediate term, we are in the early part of Intermediate wave (1) down, which is projected to continue until September 2012 with a downside target of 5800 on the DJIA. The center of Intermediate wave (1) down should be reached in March / April 2012 and result in the "Panic of 2012", giving rise to limited bank runs in which up to 5% of the western world population try to get their money out the banks as fast as they can. Here is a chart showing the initial Intermediate degree decline from the peak in May 2011.
On the longer term, Primary wave  down is projected to end around March 2016 with a downside target of around 1500 on the DJIA. The "Slope of Hope" phase of "The Great Deflation" continues until the center of Primary wave  down is reached, which is around October 2013. The Cycle degree "point of recognition" will result in the "Great Panic of 2013" which will likely be followed by large scale bank runs throughout the western world. Here is a chart showing the projected wave path of Primary wave  down.
The third phase of "The Great Deflation" started in 2007 and will continue until 2021. The third phase is labelled as Cycle wave c and is currently unfolding as a five wave structure. The downside target for the end of "The Great Deflation" is 530 in the DJIA and 48 for the S&P 500. Here is a chart of Cycle wave c of Supercycle wave (a) down.
The Nasdaq is taking a different path, but is still affected by "The Great Deflation". The 2007 peak in the S&P 500 and the DJIA is not confirmed by the Nasdaq, which peaked in 2000. Supercycle wave (a) is unfolding as a complex fractal in the Nasdaq. Here is a chart showing the projected wave path of the index during the rest of "The Great Deflation".
The preferred scenario for the Nasdaq is that Supercycle wave (a) is unfolding as a double zigzag with the low point in 2024. The reasoning for the double zigzag comes from the tendency of waves A and C to be related to each other (equality or a 1.618 ratio is most common) in a zigzag. The tech bubble started at roughly 55 in 1974, and bubbles are always fully retraced. Since the first zigzag does not retrace the entire bubble, a second zigzag is needed to take the index below the start of the bubble. The Nasdaq 100 should be on a similar wave path.
There is also a deflationary collapse in progress for commodities as well, and oil is a great example. Here is a chart of crude oil showing the projected outlook from 2008 to 2024.
As with the Nasdaq, the preferred scenario is a double zigzag for Supercycle wave (a). The first zigzag, labelled as Cycle wave w, should correspond with Primary waves , , and  of Cycle wave c in the DJIA. Next would be Cycle wave x, which would correspond with Primary wave  up (2016 - 2019) in the DJIA. A second zigzag would then unfold, forming a bullish divergence with the DJIA in 2024 (the DJIA does not hit a new low in 2024).
The deflationary collapse in crude oil will result in an oil supply crash as OPEC and Big Oil shut down production of oil from tar sands, shale, and deep sea drilling in an effort to put a floor on a falling market and protect their balance sheets. The oil supply crash is coming in 2017.