Select Page

Upwards movement quickly invalidated the hourly wave count during Monday’s session. The structure for this correction is not what was expected in the last analysis and the hourly wave count has changed. The daily wave counts remain the same.

The two daily wave counts differ at monthly chart level and cycle degree. Members may review monthly charts here.

Click on the charts below to enlarge.

First Daily Wave Count.

S&P 500 first daily 2012

At super cycle degree this wave count sees a very rare expanding triangle unfolding, and cycle wave d upwards within the triangle is a double zigzag which must move beyond the end of cycle wave b.

Within the second zigzag of the double, primary wave Y, wave (C) black must unfold as a five wave structure.

Waves 1 through to 3 blue are complete. Wave 2 blue unfolded as a brief zigzag, and wave 4 blue looks like a double zigzag exhibiting alternation.

Further downwards movement for wave 4 blue may not move into wave 1 blue price territory. This wave count is invalidated with movement below 1,380.39.

When Elliott’s first channeling technique is used about this impulse it does not work. The channel will have to be drawn correctly when wave 4 blue is complete.

S&P 500 hourly 2012

Within wave y pink, the second structure in this possible double, wave (b) green is incomplete.

Wave (b) green looks like it is unfolding as an expanded flat correction. At 1,447 wave c orange would reach 1.618 the length of wave a orange. Wave c orange is very likely to make a new high above the end of wave a orange at 1,443.9 to avoid a truncation.

Wave (b) green may not move beyond the start of wave (a) green. This wave count is invalidated in the short to mid term with movement above 1,470.96.

When wave (b) green is complete then wave (c) green should take price lower. It is likely to make a new low below the end of wave w pink at 1,430.53 because the purpose of double zigzags is to move price lower.

The structure of wave y pink may take all of this week and possibly some of the following week to complete.

Second Wave Count.

S&P 500 second monthly 2012

I am publishing this monthly chart today to illustrate a parallel channel drawn about this large double flat at grand supercycle degree.

If we have seen a recent trend change for the end of primary wave B within cycle wave a then price came very close to the upper edge of this channel.

This wave count has about an even probability with the first daily wave count because primary wave B is over 138% the length of primary wave A and it is a very rare triple zigzag structure.

S&P 500 second daily 2012

It remains possible that we have recently seen a major trend change in the S&P 500 and the DJIA.

We should always assume that the trend remains the same, until proven otherwise. At this stage we have absolutely no confirmation of a trend change. We will not have confirmation until price moves below 1,380.39 invalidating the first daily wave count.

Within the new downwards trend no second wave correction may move beyond the start of the first wave. This wave count is invalidated with any movement above 1,474.51.

If we are in a new downwards trend then it would be an unfolding leading diagonal. Wave (i) green subdivides into a zigzag, and wave (ii) green may also be seen as a zigzag.