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Elliott Wave chart analysis for the SPX500 for 2nd February, 2011. Please click on the charts below to enlarge.

SPX500 daily 2011

Yesterday’s analysis expected further upward movement. The S&P has moved mostly sideways for Wednesday’s trading session and, therefore, the situation has changed very little.

We are looking for the end to this upward trend as wave 5 pink will end wave 5 blue, which will end wave C black, which will end primary wave 2.

Waves 4 and 2 pink are proportional to each other in length, giving this wave 5 blue a nice impulsive five wave structure. Wave 3 pink is just 15 points short of 4.236 the length of wave 1 pink. At 1,345 wave 5 pink will reach 0.618 the length of wave 3 pink.

At 1,349.9 wave C black will reach 0.618 the length of wave A black.

Ratios within pink wave 3 are: wave 3 green is 6.3 points short of equality with wave 1 green and wave 5 green is just 2.8 points longer than 0.382 the length of green wave 1.

Upward movement may not move above 1,576.09 as primary wave 2 may not move beyond the start of primary wave 1. However, the alternate historical wave count for the S&P sees new highs as possible and likely.

SPX500 hourly 2011

Sideways and slightly downward movement has moved the end of wave 4 orange a little lower.

Wave 4 orange may have been over here as a regular flat correction. There is no relationship between waves A and C purple.

Any further sideways extension of wave 4 orange, if it extends further as a double combination correction, may not move below 1,290.9 as wave 4 orange may not move into wave 1 orange price territory.

At 1,321.1 wave 5 orange, if it began at 1,300.6, will reach equality with wave 1 orange. Thereafter, we should see another fourth wave correction develop which at that stage may not move into wave 1 green price territory below 1,277.6.

A final fifth wave up should end upward movement.

I have looked carefully at upward movement from the low labeled 4 pink and it seems unlikely that this impulse structure is complete. Because we can see what looks very much like a leading diagonal just below the middle (wave 1 orange) this cannot be the middle of a third wave as that may only take the form of an impulse. Therefore, I expect further upward movement to complete this structure.