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Last analysis expected upwards movement for Monday’s session with an increase in momentum, but this did not happen. Price has moved sideways in a small range remaining well above the invalidation point.

This sideways movement has indicated a more likely alternate at the hourly chart level. The target on the daily chart remains the same.

Click on the charts below to enlarge.

S&P 500 daily 2013

This wave count agrees with MACD and has some nice Fibonacci ratios in price and Fibonacci relationships in time.

Minor wave 3 is 15.1 points longer than 2.618 the length of minor wave 1.

Ratios within minor wave 3 are: there is no Fibonacci ratio between minute waves iii and i, and minute wave v is 5.44 points longer than equality with minute wave iii.

At 1,740 intermediate wave (C) would reach equality with intermediate wave (A). At 1,739 minor wave 5 would reach 0.618 the length of minor wave 3. At 1,736 minute wave v would reach 0.618 the length of minute wave iii.

Within minor wave 5 no second wave correction may move beyond the start of the first wave. This wave count is invalidated with movement below 1,560.33.

Minor wave 1 lasted a Fibonacci 21 days, minor wave 2 lasted a Fibonacci 8 days, minor wave 3 has no Fibonacci duration at 98 days, and minor wave 4 lasted 22 days, just one day longer than a Fibonacci 21.

At this stage minor wave 5 has lasted 29 sessions. A further five sessions would see it ending in a Fibonacci 34 (give or take one session either side of this would be an acceptable variation). At that time I will look to see if the structure could be considered complete. If it can we shall have an alternate wave count to consider the possibility again of a trend change at cycle degree.

Keep drawing the wider parallel channels from the monthly chart and copy them over to the daily chart.

Main Hourly Wave Count.

S&P 500 hourly 2013

Sideways movement for the last two sessions looks very much like a triangle, and it may be minuette wave (iv).

If minuette wave (iii) ended at 1,707.85 then it is just 0.51 points longer than equality with minuette wave (i). It is possible on the five minute chart to see minuette wave (iii) as over here.

Neither minuette waves (i) or (iii) are extended which indicates minuette wave (v) may be extended. At 1,741 minuette wave (v) would reach 1.618 the length of minuette wave (i).

Movement above 1,709.67 would indicate the sideways movement is completed and would provide confirmation of this wave count. The alternate below would be invalidated.

On the five minute chart the upwards movement at the end of Monday’s session from the low labeled subminuette wave e at 1,704.32 looks extremely corrective. This may be a continuation of subminuette wave e, which could unfold into a smaller contracting triangle. If subminuette wave e continues further it may not move beyond the end of subminuette wave c at 1,703.55.

This wave count is invalidated with movement below 1,703.55.

Alternate Hourly Wave Count.

S&P 500 hourly alternate 2013

Alternatively, the sideways movement may be a B wave within a second wave correction. On the five minute chart the end of the upwards movement labeled here as submicro wave (E) does look extremely corrective so fits with this analysis nicely.

For this alternate subminuette wave ii would be unfolding as a regular flat correction with micro wave B a 99.7% correction of micro wave A. Micro wave C would reach equality with micro wave A at 1,700.

Micro wave B does not fit into the parallel channel for subminuette wave ii nicely which is unusual for a regular flat.

Subminuette wave ii is longer in duration than minuette wave (ii), one degree higher, giving this wave count a slightly odd look.

Movement below 1,703.55 would confirm this wave count as at that stage the main wave count would be invalidated.

If this alternate is correct then micro wave C should be completed during tomorrow’s session and thereafter an increase in upwards momentum should follow as the middle of a third wave unfolds.

Subminuette wave ii may not move beyond the start of subminuette wave i. This wave count is invalidated with movement below 1,684.94.