Elliott Wave chart analysis for the SPX500 for 16th December, 2010. Please click on the charts below to enlarge.
The S&P has moved sideways again, remaining within our invalidation points for both main and alternate hourly wave counts.
We still do not have confirmation of a trend change and until that happens we should continue to assume that the trend remains up.
Wave 4 blue should not move into wave 1 blue price territory, below 1,129.9. If this invalidation point is breached we must then consider the possibility that primary wave 2 is over and primary wave 3 is underway. That seems highly unlikely at this stage.
Wave 4 blue is likely to end closer to the lower end of the wide blue parallel channel containing wave C black to the upside.
Main Hourly Wave Count
This wave count is altered again from yesterday after further movement. It is most likely that wave 1 orange was a leading contracting diagonal.
Wave 2 purple may not move beyond the start of wave 1. Therefore, the invalidation point remains at 1,246.6.
Wave 2 purple may end about 1,244.5 where wave C aqua reaches 0.382 the length of wave A aqua. If wave C aqua were to reach 0.618 the length of wave A aqua this wave count would be invalidated.
This wave count will be initially confirmed with movement below 1,232.1. At that stage we should expect price to continue lower towards the lower end of the parallel channel containing wave C black on the daily chart.
Final confirmation will come with movement below 1,172.6.
Alternate Hourly Wave Count.
As before this alternate wave count is the same as the main, with the exception of the degree of labeling since the end of wave 4 orange.
Movement below 1,232.1 will invalidate this wave count.
If price moves above 1,246.6 this wave count will be confirmed. In that event expect price to continue higher towards a target at 1,262 where wave C green will reach 2.618 the length of wave A green.
Alternate Daily Wave Count.
Movement below 1,206.6 would see an end to wave 1 pink and downward movement as wave 2 pink for this wave count, rather than a fourth wave correction within wave 1 pink, as labeled here. This is why I have left the invalidation point at 1,172.6
Movement below 1,172.6 will immediately invalidate this wave count.
This wave count sees wave 4 blue as lasting only 6 days which is out of proportion to wave 2 blue. This seems unlikely.