S&P 500 Elliott Wave Technical Analysis – 29th May, 2014

Upwards movement was again expected. Movement remains contained within the small channel on the hourly chart. The target remains the same.

Summary: Upwards movement is incomplete. The target is at 1,939 to 1,940 and this may be met in two more days / sessions. Upwards movement is most likely to end when the upper i-iii pink trend line is overshot.

This analysis is published about 08:47 p.m. EST. Click on charts to enlarge.

The aqua blue trend lines are critical. Draw the first trend line from the low of 1,158.66 on 25th November, 2011 to the next swing low at 1,266.74 on 4th June, 2012. Create a parallel copy and place it on the low at 1,560.33 on 24th June, 2013. While price remains above the lower of these two aqua blue trend lines we must assume the trend remains upwards. This is the main reason for the bullish wave count being my main wave count.

Bullish Wave Count.

S&P 500 daily 2014

This bullish wave count expects a cycle degree correction was over at 666.79 for a fourth wave, and a new cycle degree bull market began there for a fifth wave. Within cycle wave V primary waves 1 and 2 are complete. Within primary wave 3 intermediate wave (1) is almost complete.

Minor wave 5 is an almost complete ending contracting diagonal. Within an ending diagonal all the subwaves must be single zigzags, and the fourth wave should overlap first wave price territory.

Within the final fifth wave of this diagonal minuette wave (b) is a running contracting triangle. Minuette wave (c) is an incomplete impulse.

I would expect the final fifth wave of this diagonal to end at the upper i-iii trend line, or maybe to overshoot this trend line.

The diagonal is contracting because minute wave iii is shorter than minute wave i. Minute wave v may not be longer than equality with minute wave iii at 1,973.72 because a third wave may never be the shortest wave.

At 1,939 minuette wave (c) would reach equality with minuette wave (a). If minuette wave (c) lasts a total Fibonacci eight days / sessions then it may end in another two days / sessions.

S&P 500 hourly 2014

A further slight decrease in momentum for Thursday’s session indicates that subminuette wave v within minute wave (c) is most likely unfolding.

Draw a channel about minuette wave (c) using Elliott’s first technique: draw the first trend line from the highs labeled subminuette waves i to iii, then place a parallel copy upon the low labeled subminuette wave ii. Subminuette wave iv is contained within this channel. I would expect subminuette wave v to remain contained within an Elliott channel.

At 1,940 subminuette wave v would reach equality in length with subminuette wave iii.

When the channel is clearly breached by downwards movement then minuette wave (c) may be over. If the upper i-iii pink trend line of the diagonal (copied over from the daily chart) is overshot first then I will have confidence that minuette wave (c) is over. If the pink i-iii trend line is not met or overshot first then I would consider downwards movement to more likely be a second wave correction within minuette wave (c).

At 1,939 minuette wave (c) would reach equality in length with minuette wave (a).

Within micro wave 3 no second wave correction may move beyond its start below 1,909.82.

S&P 500 5 minute 2014

Bearish Alternate Wave Count.

S&P 500 daily bear 2014

This bearish alternate wave count expects that the correction is not over. The flat correction which ended at 666.79 was only cycle wave a of a larger super cycle second wave correction.

Cycle wave b is now longer than the maximum common length of 138% for a B wave of a flat correction.

Cycle wave b is an almost complete zigzag structure.

A clear breach of the large maroon – – – channel on the monthly and weekly charts is required for confirmation of this wave count. If that happens then this would be my main wave count and would be strongly favoured. Only once this wave count is confirmed will I calculate downwards targets for cycle wave c for you; it would be premature to do that prior to confirmation.