Elliott Wave chart analysis for the SPX500 for 28th October, 2010. Please click on the charts below to enlarge.
We still have two wave counts for the S&P. Downwards movement has again found resistance at the lower trend line for wave C pink.
While price remains above 1,158.9, and within the pink parallel channel drawn on the daily chart, we must assume the trend remains up.
Main Wave Count.
This wave count follows on from yesterday which sees an end to upwards movement. However, the trend change is unconfirmed. When we can see a full candlestick outside the lower edge of the pink parallel channel on the daily chart then we will have confirmation that the trend has changed from up to down.
Within wave 2 blue there is no fibonacci ratio between waves A and C pink.
Ratios within wave C pink are: wave 3 green is 13.7 points short of 1.618 the length of wave 1 green and wave 5 green is just 0.4 points short of 0.382 the length of wave 3 green.
This wave count is invalidated by movement above 1,196.1.
I have adjusted the wave count for wave 1 orange from yesterday’s interpretation. This wave count has a slightly better fit.
Wave 2 orange may have been over at 1,190.6. Alternatively, this may have been only wave A of wave 2 orange. If wave 2 orange extends further upwards it cannot move above the start of wave 1 orange at 1,196.1.
Ratios within wave 2 orange are: wave 3 purple has no fibonacci ratio to wave 1 and wave 5 purple is just 0.35 points short of 0.382 the length of wave 1.
Within wave 2 orange if it was over here wave C purple is just 2 points longer than 0.618 the length of wave A purple.
Because wave 3 orange must move beyond the end of wave 1 orange this wave count will be initially confirmed with movement below 1,171.1.
We will have final confirmation of a trend change with a breach of the trend channel and movement below 1,158.9.
Alternate Wave Count.
This alternate wave count expects further upwards movement.
Because wave 3 green is 1.9 points shorter than wave 1 green this wave count has a maximum allowable upwards movement for wave 5 green to equality with wave 3 green, because wave 3 cannot be the shortest. Therefore, upwards movement cannot move above 1,198.7.
Wave 5 green is unfolding as an ending contracting diagonal. Each subwave of an ending diagonal must subdivide into a zigzag.
Wave 4 orange of the ending diagonal is best seen as a double zigzag.
Within wave W purple wave C aqua is just 1.5 points short of equality with wave A aqua.
Within wave X purple wave C aqua is just 0.3 short of equality with wave A aqua.
Within wave Y purple wave C aqua is just 0.7 points short of equality with wave A aqua.
For upwards movement labeled wave A purple ratios are: wave 3 aqua is just 0.78 short of 2.618 the length of wave 1 aqua and wave 5 aqua is just 0.4 short of 1.618 the length of wave 1 aqua.
At 1,194.1 wave 5 orange to end this diagonal will reach 0.618 the length of wave 3 orange. This would see a fifth wave truncation.
If we see movement below 1,171.1 then we should use the main wave count.