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Last analysis had three hourly wave counts and the first two most likely wave counts expected more upwards movement.

Price moved mostly sideways during Monday’s session and the situation is unchanged.

Click on the charts below to enlarge.

S&P 500 daily 2012

The structure for primary wave B is a triple zigzag. Because three is the maximum number of structures within a multiple when this third zigzag is finally complete then the entire correction for primary wave B must be complete. There is no other Elliott wave structure which could allow for upwards movement within this wave count at cycle degree.

Wave (Z) black is incomplete as an exaggerated zigzag and wave C blue within it is incomplete.

Within wave iii pink of wave C blue there are some interesting Fibonacci time relationships: wave (i) green lasted 14 days (one more than a Fibonacci 13), wave (ii) green lasted a Fibonacci 8 days, wave (iii) green lasted 20 days (one less than a Fibonacci 21), and wave (iv) green may have been over in a Fibonacci 3 days. So far wave (v) green may have lasted 5 days. In another 3 days it will be a Fibonacci 8 and thereafter a further 5 sessions would take it to a Fibonacci 13. So I would expect this upwards trend to pause in another 3 or 8 sessions.

At 1,548 wave C blue would reach equality with wave A blue. At that point primary wave B would be a 166% correction of primary wave A. This target may be too high. When waves iii and iv pink are complete I will recalculate the target based upon pink wave degree.

I have used Elliott’s channeling technique to draw a channel about wave (Z) black zigzag. Price may find resistance at the upper edge of the channel.

Within wave iii pink wave (iv) green may not move into wave (i) green price territory. This wave count is invalidated with movement below 1,448.

I have drawn a double wide channel about wave iii pink: draw the first trend line from the highs of waves (i) to (iii) green then place a parallel copy upon the low of wave (ii) green. Place a second parallel copy mid way within the channel. Price may remain within the upper half of the channel and may find resistance at the upper trend line.

Main Hourly Wave Count.

S&P 500 hourly 2012

The main hourly wave count now has an odd look because wave 4 purple is so out of proportion to wave 2 purple. This reduces the probability that this wave count is correct. If price continues to move further sideways I will discard this main wave count in favour of the first alternate below.

At 1,531 wave iii orange would reach 1.618 the length of wave i orange. At 1,529 wave 5 purple would reach equality with wave 3 purple. This target has a reasonable probability. It would still be one or two sessions away.

At 1,534 wave (v) green would reach 0.618 the length of wave (i) green.

If wave 4 purple continues further sideways then it may not move into wave 1 purple price territory. This wave count is invalidated with movement below 1,504.52.

Alternate Hourly Wave Count.

S&P 500 hourly alternate 2012

Sideways movement for Monday’s session looks more like a wave at orange degree. This first alternate has a slightly better look today.

This alternate expects upwards movement for the next session to increase in momentum.

At 1,537 wave (v) green would reach 0.618 the length of wave (i) green.

Within wave (v) green wave ii orange may not move beyond the start of wave i orange. This wave count is invalidated with movement below 1,498.49.

Second Alternate Hourly Wave Count.

S&P 500 hourly alternate II 2012

If we simply move the degree of labeling within wave (v) green up one degree we see that wave iii pink in its entirety may now be over.

This would see a remarkably brief wave (v) green though, and waves (iv) and (v) green would have no Fibonacci time relationship.

This alternate has the lowest probability, because of the brevity of wave (v) green. We may use it if it is confirmed with movement below 1,498.49. At that stage we may expect choppy overlapping sideways movement for about a week or so.

Wave iv pink may not move into wave i pink price territory. This wave count is invalidated with movement below 1,409.16.