Upwards movement for Wednesday’s session invalidated the labeling on the main hourly wave count. I have adjusted this wave count today.

We still have the same two wave counts with the main wave count having only a slightly higher probability than the alternate.

Click on the charts below to enlarge.

Main Wave Count.

The widest maroon channel is copied over from the monthly chart and contains all of cycle wave b. It may be that price found final resistance at the upper edge of this channel.

The black channel in the middle is drawn about the zigzag of primary wave Y. Draw the first trend line from the start of primary wave Y to the end of intermediate wave (B). Place a parallel copy upon the extreme within intermediate wave (A). The upper edge of this channel also may be where price found resistance and where intermediate wave (C) ended.

The smallest blue channel is the most conservative best fit I can see for intermediate wave (C). It is very clearly breached by downwards movement.

I have looked back to September 2000 on the daily chart at smaller narrow channels about intermediate degree movements. Most of the time a breach like this indicates a trend change, but not always. What would give me more confidence in this trend change is a clear breach of the black intermediate degree channel. When that is breached I will calculate downwards targets for you.

There is no classic technical divergence between price and MACD on the daily or weekly charts. This is possible, but unusual for the S&P 500. This must reduce the probability of this wave count. We must still seriously consider the alternate.

There are no Fibonacci ratios between minor waves 1, 3 and 5 within intermediate wave (C). There is no Fibonacci ratio between intermediate waves (A) and (C). This lack of Fibonacci ratios slightly reduces the probability of this main wave count.

Minor wave 2 may not move beyond the start of minor wave 1. This wave count is invalidated with movement above 1,687.18.

I have adjusted the labeling within minuette wave (ii). Unexpected upwards movement for Wednesday’s session is more likely to be a second wave correction within an impulse, than part of a leading diagonal structure.

Minuette wave (ii) may be unfolding as an expanded flat correction. I have checked the subdivisions of this structure, particularly subminuette wave b, on the five and one minute charts. The subdivisions fit correctly.

Subminuette wave b is a 184% correction of subminutte wave a. Subminuette wave c has no Fibonacci ratio to subminuette wave a.

Ratios within subminuette wave c are: micro wave 3 has no Fibonacci ratio to micro wave 1, and micro wave 5 is just 0.24 longer than 0.382 the length of micro wave 3.

It is likely that minuette wave (ii) is over here, just at the 0.382 Fibonacci ratio of minuette wave (i).

Because expanded flats do not fit into parallel channels I have drawn a small channel about subminuette wave c within it. When this small channel is clearly breached by downwards movement then we may have the start of minuette wave (iii).

Minuette wave (iii) must make a new price low below the end of minuette wave (i) at 1,577.70. When price moves below this point we may have a little more confidence in this main wave count, at least at the hourly chart level.

At 1,483 minuette wave (iii) would reach 1.618 the length of minuette wave (i). This would mean the target for minute wave iii on the daily chart is too high and minute wave iii may be either 2.618 the length of minute wave i, or may have no Fibonacci ratio to minute wave i.

Minuette wave (ii) may not move beyond the start of minuette wave (i). This wave count is invalidated with movement above 1,654.19.

Alternate Wave Count.

The biggest problem with this wave count and the reason it is an alternate is the size of minor wave 4: it is out of proportion to all the other corrections within intermediate wave (C) and clearly breaches a channel containing intermediate wave (C) no matter how that channel is drawn. Sometimes fourth waves do this and so we must consider this possibility.

Within intermediate wave (C) minor wave 3 is 23 points longer than 4.236 the length of minor wave 1.

The lack of classic technical divergence between price and MACD supports this wave count. A final fifth wave up with slowing momentum would provide divergence and give a typical look.

At 1,740 intermediate wave (C) would reach equality with intermediate wave (A).

Minor wave 4 may not move into minor wave 1 price territory. This wave count is invalidated with movement below 1,409.16.

Within minute wave i of minor wave 5 we may now have minuette waves (i) through to (iii) complete. Minuette wave (iii) has no Fibonacci ratio to minuette wave (i).

Ratios within minuette wave (iii) are: subminuette wave iii has no Fibonacci ratio to subminuette wave i, and subminuette wave v is 0.79 points short of 0.618 the length of subminuette wave iii.

Minuette wave (iv) would probably move a little lower, as it is unlikely to be complete. Minuette wave (iv) may not move into minuette wave (i) price territory. This wave count is invalidated with movement below 1,586.45.