Elliott Wave chart analysis for the SPX500 for 14th March, 2011. Please click on the charts below to enlarge.
Downwards movement invalidated the hourly wave count. However, price has not made a new low and the main idea for the hourly wave count remains the same.
I have expanded the target range for wave 5 blue to end wave C black. About each of these points we will see if there is a satisfactory five wave structure upwards for wave 5 blue.
At 1,406.2 wave 5 blue will reach equality with wave 1 blue. At 1,481.5 wave 5 blue will reach 1.618 the length of wave 1 blue. At 1,561.2 wave C black will reach equality with wave A black.
At this stage we need movement above 1,326.4 to provide some confirmation of our wave count. At that stage the probability that upwards movement will continue towards new highs increases.
This wave count is invalidated with movement above 1,576.09.
Because waves D and E green of the triangle for wave B pink are both very strong three wave structures it is very difficult to see these as part of a new impulse downwards; wave D green would have to be seen as a five. So it is difficult to see the correction labeled B pink triangle as anything but a triangle.
It is possible that this triangle was a second wave and that we have seen a trend change at primary degree, although it is extremely rare for a triangle to be the sole corrective structure within a second wave. This possibility will be eliminated with price movement above 1,326.4.
Main Hourly Wave Count.
This main hourly wave count sees wave 4 blue as over.
Movement above 1,326.4 would provide confidence in this wave count. At that stage upwards movement may not be a second wave correction within wave 4 blue.
Ratios within wave 1 purple are: wave 3 aqua has no fibonacci ratio to wave 1 aqua and wave 5 aqua is 1.9 points longer than equality with wave 1 aqua.
This hourly wave count expects further upwards movement for the next session. Wave 3 purple must move beyond the end of wave 1 purple above 1,309.4.
Any further extension downwards of wave 2 purple may not move beyond the end of wave 1 purple. This wave count is invalidated with movement below 1,286.8.
Alternate Hourly Wave Count.
It is possible that downwards movement may have been only wave 1 green of wave C pink to end wave 4 blue zigzag.
Upwards movement labeled here 2 green certainly does have a strong three wave look.
Movement below 1,286.8 would invalidate the main hourly wave count and confirm this alternate.
At that stage we should expect further downwards movement to end an impulse for wave C pink of wave 4 blue.
Movement above 1,309.4 would invalidate this wave count as any second wave correction within wave 3 green may not move beyond the start of the first wave within it.
The long term outlook for both hourly wave counts is the same.