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Elliott Wave chart analysis for the SPX500 for 23rd December, 2010. Please click on the charts below to enlarge.

SPX500 daily 2010

As expected from yesterday’s analysis the S&P continues to move slowly higher. This is an expiring trend, but it is not likely to be quite over yet.

When upward movement is over for wave B pink we should expect strong downward movement for wave C pink to end this expanded flat correction for wave 4 blue.

In the long term we may see wave C black end about 1,349.9 where it reaches 0.618 the length of wave A black, or at 1,561.2 where it reaches equality with wave A black. This second target is more likely as equality is the most common relationship between waves A and C.

Upward movement may not move above 1,576.09 as primary wave 2 may not move beyond the end of primary wave 1.

Downward movement for this wave count may not move below 1,129.9 as wave 4 blue may not move into wave 1 blue price territory. If this wave count is invalidated by downward movement then we must consider the possibility that primary wave 2 is over and primary wave 3 is underway.

SPX500 hourly 2010

We may have seen an end to a fourth wave correction at aqua degree to end Thursday’s session.

At 1,261.3 wave 5 aqua will reach 0.618 the length of wave 1 aqua. At 1,261.4 wave 3 purple will reach equality with wave 1 purple. Therefore, 1,261 (or barely just above) is our short term target for this next upward wave.

When that is complete then another fourth wave correction should follow which may not move into wave 1 purple price territory below 1,246.6.

Thereafter, a final upward wave may end this B wave at pink degree about the target of 1,262. At that stage we should look out for a trend change at minute degree.

If this wave count is invalidated by downward movement below 1,246.6 then the likelihood that wave B pink is over will increase.

Daily Alternate Wave Count.

SPX500 daily 2010

This alternate wave count sees wave 4 blue as brief, only 6 days in duration. It is out of proportion to wave 2 blue and for that reason I do not favour this wave count.

If this wave count is correct then wave 5 blue may be nearing completion, or only wave 1 pink would be nearing completion.