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Last analysis expected a little more upwards movement to a target at 1,518 to 1,519 before a trend change. However, price has moved lower to reach below the invalidation point on the hourly chart.

I have the same main wave count with an hourly chart, and a new alternate daily wave count for you today.

Click on the charts below to enlarge.

S&P 500 daily 2013

The structure for primary wave B is a triple zigzag. 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 again be considered complete as an exaggerated zigzag.

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

Wave A blue lasted 87 days (2 short of a Fibonacci 89). Wave B blue lasted 28 days. Wave C blue may have lasted 51 days.

Movement below 1,448 would invalidate the alternate wave count and so provide some confidence in a trend change.

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

Movement below 1,496.76 cannot be a second wave correction within wave (v) green and so wave (v) green must be over. It can be seen as a complete impulse on the 5 minute chart.

Primary wave B is a 154% correction of primary wave A.

There is no Fibonacci ratio between waves A and C blue.

Ratios within wave C blue are: wave iii pink has no Fibonacci ratio to wave i pink and wave v pink is 3.31 points short of 0.618 the length of wave iii pink.

Within wave v pink are there are no Fibonacci ratio between waves (i), (iii) and (v) green.

The parallel channel drawn about wave v pink using Elliott’s technique is clearly breached by downwards movement. This may be a very early indication of a trend change.

On the hourly chart we now have a five down complete. This may be the first impulse of a new trend. Alternatively, it may also be wave A of a correction. Further downwards movement is still required to confirm a trend change.

Within a new downwards trend wave (ii) green may not move beyond the start of wave (i) green. Movement above 1,514.41 would invalidate this wave count and confirm the alternate below.

This wave count has a higher probability than the alternate mostly due to the length of primary wave B in relation to primary wave A. The probability of primary wave B continuing to be even longer is low.

Alternate Wave Count.

S&P 500 daily alternate 2013

The maximum common length of wave B in relation to wave A within a flat correction is 138%. There is no rule for the maximum length, but if primary wave B reaches twice the length of primary wave A at 1,644 although the wave count is not technically invalidated at that point the probability would be so low it should be discarded. At that stage I would switch the monthly wave count to the alternate expanding triangle wave count, which requires a new all time high.

This alternate looks at the possibility that within wave iii pink of wave C blue the middle of it, wave (iii) green, is extending. However, this wave count does not agree with MACD in that the strongest part of this upwards movement is wave i orange within wave (iii) green. MACD agrees with the main wave count. This reduces the probability that this alternate is correct.

At 1,548 wave C blue would reach equality with wave A blue.

Within wave iii pink wave (iv) green may not move into wave (i) green price territory. This alternate is invalidated with movement below 1,448.