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Elliott Wave chart analysis for the SPX500 for 14th February, 2011. Please click on the charts below to enlarge.

SPX500 daily 2011

As expected, the S&P completed a fourth wave correction and turned back up.

We should expect one final small upward wave to end this structure. At that stage we shall have a complete impulsive structure at all wave degrees which has a very mature look on hourly and daily charts.

In two more trading days wave 5 pink will have lasted a fibonacci 13 days. It may end there.

When this structure is complete our main wave count expects extremely fast downward movement as primary wave 3 begins.

When we can see a full candlestick below the small pink parallel channel we shall have early indication of a trend change. Movement below 1,265.1 will confirm a trend change as at that stage downward movement may not be a second wave correction within wave 5 pink and therefore wave 5 pink must be over. I would not want to place the labels for wave 3 and 4 pink anywhere else.

Finally, movement below the wide blue parallel channel will be confirmation of a trend change at intermediate and, therefore, at primary degree.

Primary wave 3 must move price beyond the end of wave 1. Therefore, price must fall to new lows below 666.8.

SPX500 daily 2011

We had expected wave 4 orange downward to end about 1,323.3 to 1,322.4. It fell short of this target zone by 3.1 points.

Wave 4 orange is an expanded flat correction with wave B purple a 157% correction of wave A purple, and waves A and C purple have no fibonacci ratio.

Thereafter, we have seen further upward movement to a slightly new high.

Within this final fifth wave at orange degree it is likely that we have seen the first and second waves at purple degree complete.

We should see further upward movement for the next session to a new high as wave 3 purple must move beyond the end of wave 1 purple.

At 1,336.9 wave 5 orange will reach equality with wave 1 orange. At 1,340.1 wave 5 green will reach equality with wave 3 green and its maximum allowable length for this wave count. Therefore, this is our target for upward movement to end within, and not above.

At this stage for the next session we should not see movement below 1,326.4 as any further downward extension of wave 2 purple may not move beyond the start of wave 1 purple.

When we can see a satisfactory five wave structure upward for wave 5 orange then upward movement may be over.