Wave 2 can be irregular, and they can register new highs and new lows, depending on if it is a bull or bear market. The rule is that (in a bull market) wave 2 can not go lower than the start of wave 1, but it can go higher...
As for the steepness of the descent in wave 2, I don't believe there is a rule that suggests that wave 2 can not be steep, just that it can not go below the start of wave 1. Heck, look at forex and you see very steep waves as a rule!
Time will tell if the count is correct. If the market goes below 88 I will know my count is wrong. That's one of the things I like about Elliot. There are clear indications of when you can know for certain your count is wrong. (If the market does break 88, then probably what I thought was a bear market-ending wave 5 down at 88 was actually a wave 3 ending.)
In the meantime, if my count is correct, either wave 3 will start soon, or wave 2 will extend into something more complex. Either way, this is going to get exciting soon.
and search for: "irregular flat" you can learn the rules regarding this type of wave. Interestingly, the author makes point that the fact that the market makes a new high suggests that the market really is anxious to get on with the next impulse wave up.