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Last analysis expected strong upwards movement from the S&P 500 which is what happened. The wave count remains the same and the invalidation point on the hourly chart can be moved closer.

Click on the charts below to enlarge.

S&P 500 daily 2012

The structure for primary wave B is a triple zigzag, and price is now within the third zigzag in the triple labeled wave (Z) black.

Wave (Z) black is incomplete and is unfolding as an exaggerated zigzag.

Wave A blue must be truncated to subdivide into a five wave structure.

At 1,470 wave C blue would reach 0.618 the length of wave A blue. About this point primary wave B would also be only 139% of primary wave A. Movement to slightly above 1,470 would avoid a truncation and keep the length of primary wave B closer to the common maximum of 138%.

There is no upper invalidation point for this wave count, but significant movement above 1,470 has a low probability.

Wave A blue lasted 87 days (2 short of a Fibonacci 89). Wave B blue lasted 28 days. I would expect wave C blue to be about 34 days in duration. So far it has only lasted 20 days and it should continue for another couple of weeks or so.

Wave C blue must subdivide into a five wave structure as either an ending diagonal or an impulse. An ending diagonal requires all subwaves to subdivide as zigzags and because the first wave upwards labeled i pink is a five wave impulse an ending diagonal may be eliminated. Wave C blue must be unfolding as an impulse. The structure is incomplete and requires further upwards movement.

S&P 500 hourly 2012

Upwards movement needs to show an increase in momentum beyond that seen for the high of wave i pink. Using MACD as a guide for momentum indicates that the strongest piece of upwards movement is yet to unfold.

Monday’s upwards movement subdivides nicely into a five wave impulse for wave 1 purple, a zigzag for wave 2 purple, and an incomplete impulse for wave 3 purple. Tomorrow’s session should see an increase in upwards momentum.

Wave iii orange must move beyond the end of wave i orange to a new high above 1,438.59.

Thereafter, wave iv orange may not move back into wave i orange price territory.

At 1,460 wave (iii) green would reach 1.618 the length of wave (i) green.

Within wave iii orange wave 2 purple may not move beyond the start of wave 1 purple. This wave count is invalidated with movement below 1,411.88.