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Last analysis expected price to continue higher during Monday’s session towards a short term target at 1,477. The S&P 500 did not do this and price has moved sideways in a very small range.

The daily wave count is the same. I have two hourly wave counts for you which differ in the degree of labeling for the most recent movement. We may use confirmation / invalidation points to work with these two wave counts over the next couple of sessions.

Click on the charts below to enlarge.

S&P 500 daily 2013

The structure for primary wave B is a triple zigzag, and price is now within the third zigzag in the triple labeled wave (Z) black. Because three is the maximum number of structures within a multiple when this third zigzag is finally complete then the entire correction for primary wave B must be complete. There is no other Elliott wave structure which could allow for upwards movement within this wave count at cycle degree.

Wave (Z) black is incomplete and is unfolding as an exaggerated zigzag.

Wave A blue must be truncated to subdivide into a five wave structure.

At 1,470 wave C blue passed 0.618 the length of wave A blue. Wave C blue has avoided a truncation.

At this time primary wave B has just passed 139% of primary wave A. It is unlikely that price will move too much higher so that primary wave B does not move too far from the common maximum length of 138% the length of primary wave A. When we know the end of waves iii and iv pink within wave C blue then I can use pink wave degree to calculate a target for this upwards movement to end.

There is no upper invalidation point for this wave count, but significant movement above 1,470 has a low probability.

Wave A blue lasted 87 days (2 short of a Fibonacci 89). Wave B blue lasted 28 days. So far wave C blue has lasted 38 days and at this stage I am expecting it to possibly continue for another one to two weeks.

Wave C blue is unfolding as an impulse. The structure is incomplete and requires overall further upwards movement.

Main Hourly Wave Count.

S&P 500 hourly 2013

This main wave count has a higher probability than the alternate because it sees less upwards movement and so primary wave B would remain closer to 138% the length of primary wave A.

Wave iii pink may have ended a session earlier than expected.

Ratios within wave iii pink are: wave (iii) green is 4.79 points longer than equality with wave (i) green and there is no Fibonacci ratio between wave (v) green and either of waves (i) or (iii) green.

Ratios within wave (v) green are: wave iii orange has no Fibonacci ratio to wave i orange, and wave v orange is 1.43 points longer than 2.618 the length of wave i orange.

Wave ii pink was a brief shallow zigzag, correcting 36% of wave i pink. Given the guideline of alternation we may expect wave iv pink to be deep, about 0.618 the length of wave iii pink at 1,418.79. Wave iv pink may be a flat correction, a double zigzag or less likely a double combination, zigzag or triangle. If wave iv pink is the most common type of flat, an expanded flat, then wave (b) green within it may make a new price extreme beyond the start of wave (a) green. We may see a new high within this fourth wave correction. This is why there is no upper invalidation point.

I am expecting at this early stage for wave iv pink to most likely last about eight sessions.

Wave iv pink may not move into wave i pink price territory. This wave count is invalidated with movement below 1,409.16.

Movement below 1,451.64 would invalidate the alternate wave count below and confirm this main wave count.

Alternate Hourly Wave Count.

S&P 500 hourly alternate 2013

If we move the degree of labeling within wave (v) green all down one degree then only wave i orange within wave (v) green may be complete.

If this is the case then we may see overall upwards movement for a few more sessions before wave iii pink is complete.

Wave ii orange should be over during tomorrow’s session. It may not move beyond the start of wave i orange. This wave count is invalidated with movement below 1,451.64.

At 1,490 wave (v) green would reach 0.618 the length of wave (i) green.