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.