Elliott Wave chart analysis for the S&P 500 for 13th April, 2011. Please click on the charts below to enlarge.

We were expecting a little upwards movement yesterday and we did get some, but not as much as expected. Thereafter, a new low followed.

Wave 2 pink is incomplete and should move lower yet before it is over.

Wave behaviour still does not support the idea that primary wave 3 is here. When this second wave correction is over we should see a resumption of steady upwards movement towards targets for wave 5 blue on the daily chart.

Wave 2 pink may not move beyond the start of wave 1 pink. This wave count is invalidated with movement below 1,249.05.

Within wave 2 pink we have two possibilities and so we have two hourly wave counts below.

Main Hourly Wave Count.

My analysis of the subdivision of wave 1 orange must have been incorrect yesterday. Wave 4 orange did not overlap wave 1 orange price territory and so wave A green is unlikely to be a leading diagonal. It is more likely to be a simple impulse. Wave 5 orange when viewed on the 15 minute chart is a perfect impulse.

Ratios within wave A green are: wave 3 orange is 2.47 points short of 1.618 the length of wave 1 orange and wave 5 orange is 1.95 points longer than 0.618 the length of wave 1 orange.

Wave B green is most likely to break out of the narrow orange trend channel drawn here about wave A green. It should be a clear three wave structure which shows up on the hourly chart as a three and is most likely to correct to about the 0.382 fibonacci ratio of wave A green, which is at 1,320.75.

Movement above 1,317.16 would provide confirmation of this wave count as that is where the alternate below is invalidated.

When we have an end to wave B orange within it we may expect wave C orange upwards to reach equality with wave A orange and so be about 7.97 points in length.

Wave B green may not move beyond the start of wave A green. This wave count is invalidated with movement above 1,339.46.

Alternate Hourly Wave Count.

The upwards movement labeled here B green to end Wednesday’s session is a three wave structure when viewed on a 15 minute chart. Wave B green may have been over there.

If this is correct then Thursday’s session should see a five wave downwards structure for wave C green begin. A second wave correction within this may not move beyond the start of the first wave and so this wave count is invalidated with movement above 1,317.16.

At 1,286.89 wave C green will reach equality with wave A green. This point is close to the 0.618 fibonacci ratio for wave 1 pink which is at 1,283.59. This is our target for downwards movement for Thursday’s session.