Elliott Wave chart analysis for the SPX500 for 30th September, 2010. Please click on the charts below to enlarge.
The S&P moved higher again yesterday closer to our target zone. We can again count a complete five wave structure within wave C pink to end this second wave correction. The next couple of days should clarify whether or not we have a high in place.
If wave 2 blue ended yesterday wave C within it is just 2.7 points short of equality with wave A. Wave 2 blue is a 71% correction of wave 1 blue.
If wave 2 blue ended yesterday it has no fibonacci time relationship.
It is also possible that we may see one more push upwards. We need to see movement below 1,131.6 and finally below 1,121.9 to eliminate the possibility of new highs.
This wave count is invalidated with movement above 1,220.
Main Wave Count
Wave 4 green may have been a contracting running triangle. This provides a nice alternation within wave C pink between waves 2 and 4 green.
Ratios within wave C pink are: green wave 3 is just 7.7 points short of equality with wave 1 green and green wave 5 is just 4.5 points short of 0.382 the length of green wave 3. These are much better fibonacci ratios for this wave count than previously.
If we have movement below 1,131.6 we may have more confidence in this wave count. Final movement below 1,121.9 will eliminate any alternate that could see a new high.
Four out of five of these waves within the triangle may be subdivided into zigzags. Downwards movement labeled wave 1 purple is strongly impulsive supporting this wave count.
Wave E orange of the triangle is just 0.37 points longer than 0.618 the length of wave D orange. Wave C orange is also close to 0.618 of its predecessor, just 2.7 points longer.
Movement below 1,121.9 will give final confirmation of this trend change.
Alternate Wave Count
It is also just possible to count upwards movement as an ending contracting diagonal. If this is correct wave 4 orange cannot be longer than wave 2 orange, which will be achieved at 1,134.8.
My main objection to this wave count is seeing wave 1 orange of this ending diagonal as a zigzag. Each wave for an ending diagonal must be a zigzag and this first wave has a strong impulsive look to it.
Wave 4 orange cannot move beyond the end of wave 2 orange of this diagonal so this wave count is invalidated with movement below 1,131.6.
yes – the euro dollar analysis that was put out here was nice gift for me. I took positions on euro based on that. If we can not hit targets on spx, atleast we are getting hits on the euro/dollar.
If upwards movement was over at 1,157.6 on the 30th of September then we were only short of our target zone by 2.7 points. That’s not very much really, especially considering this wave is 119.2 points in length.
Also, great work on the Euro/Dollar wave count. I find it very fascinating to see movements somewhat correlated to the SnP 500 and as a result like to follow both counts.
It sure looks like they will both turn down very near the same time!
Your work is greatly appreciated!!
John A
Lara,
Thanks so much. I really appreciate the confirmation and validation points as well as your advice for stops and the like. My weakest point is clearly risk management and I’m trying to bring that up to speed.
That wave 4 green was a tricky one indeed. I could not get that count right for the life of me. It seems that I need to hold the chart at arms length to better see the bigger picture.
Hey, I heard “Fat Finger’s Freddy” is back from holiday and looking to get those ‘fingers’ working!
All the BEST!!
John
Lara, if we have started wave 3 down, does Oct 15 still have significance?
Nope. If the big trend change happened a couple of days ago then blue 2 has no fibonacci time relationship, neither does pink C. From the trend change we start counting again from a new day 1 and we will be particularly alert around times with fibonacci relationships for trend changes.
The time relationship often is found, but it is not always there. So this means it’s just more likely to see a trend change at those times, but that’s not when the trend change must occur.
Do we have a target for the alternate wave count, for wave 5 orange, looks like that one is in play.?
There was no target in the analysis because at that time we did not have an end to the fourth wave to calculate the end of the fifth from. When I produce the next analysis I’ll be able to give a target. Looking at what happened for Friday that alternate count is looking less likely actually.