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Elliott Wave chart analysis for the S&P 500 for 3rd May, 2011. Please click on the charts below to enlarge.

S&P 500 daily 2011

Movement below 1,358.59 confirmed our alternate hourly wave count and invalidated the main wave count. At that stage we expected that the S&P was most likely within a fourth wave correction at pink (minute) degree.

Wave 4 pink may not move into wave 1 pink price territory. This wave count is invalidated with movement below 1,339.46.

Wave 2 pink was a simple zigzag and so wave 4 pink is likely to be a triangle or a combination. It is unlikely at this stage to be a flat because at this stage it looks like wave A within it has subdivided into a five wave structure.

Wave 2 pink fell just short of a 50% correction of wave 1 pink. Wave 4 pink is most likely to be a shallow correction as it has little room in which to move. We are most likely to see alternation in structure rather than depth of correction between these two.

When this fourth wave correction is over we shall expect one final upwards wave to end primary wave 2. At that stage we may also use an alternate idea which sees wave 3 blue as yet to end.

S&P 500 hourly 2011

We have only the one hourly wave count today.

Wave A green downwards has subdivided into a five wave impulse. Waves 1, 3 and 5 orange are all very close to equality.

If wave 4 pink is a zigzag, or if the first structure within a double for wave 4 pink is a zigzag, then wave B green may not move beyond the start of wave A green. A zigzag is invalidated with movement above 1,370.58. This is also the case for a regular triangle.

If wave 4 pink is a triangle then wave B green may move price beyond the start of wave A green above 1,370.58 as for a running triangle. This has a lower probability than a zigzag or regular triangle.

Wave B green must subdivide into a three wave structure, or a triangle.

At this early stage we shall still expect wave 4 pink to correct to about the 0.382 fibonacci ratio at 1,341.59.

In another day or two we may have a clearer idea of the structure of this fourth wave correction.

If this wave count is invalidated with movement below 1,339.46 then my degree of labeling for this correction is incorrect and we would see it as a fourth wave at green degree. This has the wrong look and seems unlikely.