Elliott Wave chart analysis for the SPX500 for 31st March, 2011. Please click on the charts below to enlarge.
We were expecting upwards movement for Thursday’s session and we did not get it. The S&P 500 has moved sideways and slightly lower in a small range.
When this small correction is over the S&P should turn back upwards to provide confirmation of this wave count.
Overall we should see continuing upwards movement from the S&P for some time.
At 1,553.42 wave 5 blue will reach equality with wave 3 blue. At 1,564.02 wave C black will reach equality with wave A black.
This wave count expects no new all time highs for the S&P above 1,576.09.
Yesterday’s analysis saw wave 4 purple as over. This was not the case and it has extended sideways and slightly lower. At 1,323.06 wave C aqua within wave 4 purple zigzag will reach equality with wave A aqua. This should end this small correction.
At 1,339.49 wave 3 green will reach 1.618 the length of wave 1 green. At 1,340.39 wave 5 orange will reach equality with wave 3 orange. This is our target for the next upwards wave to end.
At this stage further downwards movement for wave 4 purple is expected. Wave 4 purple may not move into wave 1 purple price territory. This wave count is invalidated with movement below 1,315.91.
When wave 3 green is complete we must move the invalidation point down to 1,288.88. The upcoming fourth wave correction at green degree may not move into wave 1 green price territory. At that stage movement below 1,288.8 would invalidate this wave count.
Alternate Wave Count.
This wave count remains technically valid for the S&P500. However, for the Dow and Russell 2000 the counts were invalidated by upwards movement.
This wave count now has a very low probability but it remains technically possible.
Movement above 1,332.28 may be considered invalidation of this wave count.
Any further upwards movement for wave 2 green may not move beyond the start of wave 1 green. This wave count is invalidated with movement above 1,332.28.
Hi Lara-We are just 11 points from new all time highs in the Russell 2000. If/when this index transcends this what does that do to any argument that this index is in a correction of any kind?
I should think it renders the argument moot. What are the implications, if any, regarding the other markets? This divergence is concerning to me. What do you think?
I have a wave count which sees this upwards move as a B wave within a flat correction which may make a new high, and is actually more likely than not to do so. So I have no problem with that. The long term outlook is exactly the same, wave C will eventually take price well below the previous low about 666 in early 2009. Only if we reach 1,494.16 will this become a possibility though as wave B of a flat must reach at least 90% the length of wave A and it will do so at that point. The most common type of flat is an expanded flat where wave B is at least 105% of A and this requires a new all time high.
You will find this chart in the historic analysis at the end of the text analysis as an alternate wave count.