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Elliott Wave chart analysis for the S&P 500 for 25th April, 2011. Please click on the charts below to enlarge.

S&P 500 daily 2011

We were expecting downwards movement when markets opened after Easter and we did get some, but not as much as anticipated.

I have two hourly wave counts. This second wave correction may have been over as a shallow brief flat, or we may have only seen wave A within this second wave correction.

Targets for wave 5 blue to end remain the same. At 1,367.38 wave 5 blue will reach equality with wave 1 blue. 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.

Main Hourly Wave Count.

S&P 500 hourly 2011

It seems most likely that downwards movement was only wave A within wave 2 green. Wave 2 would be unfolding as a flat correction.

Wave B orange must be at least 90% the length of wave A orange for a flat correction. This was achieved at 1,336.89.

The maximum most common length of wave B in relation to A within a flat is 138% and this would be achieved at 1,339.78.

Wave B orange must subdivide as a three.

Thereafter wave C orange is highly likely to take price below 1,331.47 and may end about the 0.382 fibonacci ratio of wave 1 green.

If upwards movement is not a three and looks impulsive then the alternate wave count below may be used.

Alternate Hourly Wave Count.

S&P 500 hourly alternate 2011

Downwards movement may have been a flat correction which is over for wave 2 green. It is possible that this second wave was brief and shallow as this is the middle of a third wave, but it is unlikely.

Movement below 1,331.47 would invalidate this wave count.

If upwards movement develops strongly and looks impulsive then this wave count may be correct.