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The S&P 500 has moved higher and importantly the Dow has made a new high. The alternate wave count is correct for the Dow and also most likely for the S&P 500.

Click on the charts below to enlarge.

S&P 500 daily 2013

The main hourly wave count expected a little more upwards movement to 1,487 before a trend change. The alternate hourly wave count expected more upwards movement to continue. With price now reaching 1,492.56 I expect the alternate wave count is the correct count.

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 may now be complete as an exaggerated zigzag.

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

Primary wave B is now a 147% correction of primary wave A, not too much longer than the maximum common length of 138%. When primary wave B reaches twice the length of primary wave A although the wave count is not technically invalidated at that point the probability would be so low it should be discarded.

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 43 days. It may continue for another week or so to last a Fibonacci 55 days.

The first indication that a trend change has occurred will come with price movement below 1,463.76. Final confirmation will come with price movement below 1,343.35. At that stage downwards movement may not be a second wave correction within wave C blue and so wave C blue would have to be over.

I have used Elliott’s channeling technique to draw a channel about wave (Z) black zigzag. When this channel is breached by downwards movement we shall have trend channel confirmation of a trend change.

S&P 500 hourly 2013

With momentum increasing towards the end of Tuesday’s session it is likely that wave (iii) green within wave v pink began at that time.

If this labeling within wave v pink is correct then we should see upwards momentum increase a little further tomorrow.

At 1,504 wave v pink would reach 0.618 the length of wave i pink and primary wave B would be 151% the length of primary wave A.

Within wave (iii) green no second wave correction may move beyond the start of its first wave.