Last analysis expected more upwards movement towards a target at 1,780 to 1,781. Price did move higher during Wednesday’s session, but only by 3.27 points. Thereafter, downwards movement has clearly breached the parallel channel on the hourly chart.

Click on the charts below to enlarge.

This wave count has a higher probability than the alternate. Upwards movement over the last 4 1/2 years subdivides best as a zigzag. Importantly, it does not show typical features of a third wave having just passed the strongest middle portion (which the alternate says must have recently happened). If something is “off” about the supposed recovery then it must be a B wave because there is plenty that is off in this scenario in terms of social mood.

Price has again sat along the upper edge of the big maroon channel from the monthly chart, if the upper trend line is pushed out to encompass all of primary wave A. It may have found resistance in this area.

At 1,858.03 cycle wave b would reach 138% the length of cycle wave a. This wave count sees a super cycle expanded flat unfolding, and the maximum common length for a B wave within a flat is 138% the length of the A wave. Above this point this wave count would reduce in probability and it would be more likely that a longer term bull market is underway.

Intermediate wave (4) lasted 14 days, just one more than a Fibonacci 13.

The next Fibonacci duration for intermediate wave (5) to end would be in a total of 21 days on 7th November. Please note: this is a rough guideline only. Within this wave count there are few Fibonacci time relationships at primary or intermediate degree. Sometimes this happens, but not often enough to be reliable.

October is a common month for big trend changes with the S&P 500. It is also possible that intermediate wave (5) may end within the next two sessions.

Within intermediate wave (5) minor wave 3 is slightly shorter than equality with minor wave 1. This limits minor wave 5 to no longer than equality with minor wave 3, because a third wave may never be the shortest wave. This limit is at 1,803.90.

At 1,781 intermediate wave (5) would reach 0.236 the length of intermediate wave (3).

Within intermediate wave (5) no second wave correction may move beyond the start of the first wave. This wave count is invalidated with movement below 1,646.47.

We should always assume the trend remains the same, until proven otherwise. The easiest way to see this possibility is by simply moving the degree of labeling within minor wave 5 all down one degree. It is possible that only minute wave i within minor wave 5 has completed.

The subdivisions within this hourly wave count are seen in the same way as the next hourly wave count below, just the degree of labeling within minor wave 5 differs.

At 1,780 minor wave 5 would reach 0.618 the length of minor wave 3. At 1,781 intermediate wave (5) would reach 0.236 the length of intermediate wave (3).

Within minor wave 5 minute wave ii may not move beyond the start of minute wave i. This wave count would be invalidated with movement below 1,740.50

By leaving the degree of labeling within minor wave 5 the same as yesterday’s analysis it looks like minor wave 5 may be complete. Although this wave count has a better look than the main wave count we have absolutely zero confirmation of a trend change at this very early stage. The first confirmation would come with price movement below 1,740.50.

Downwards movement at the end of Wednesday’s session does not fit well as a fourth wave correction within minor wave 5; it would be larger in size and duration than all the other corrections along the way up. This downwards movement is at least one degree higher than the corrections within the upwards movement. It is either a second wave correction or part of a new downwards trend.

In looking for confirmation and confidence in this wave count I will look for the following (in order):
1. Movement below 1,740.50.
2. Movement below 1,646.47.
3. A clear breach of the black channel on the daily chart containing primary wave C.
4. A clear breach of the larger maroon channel on the monthly chart containing cycle wave b.
5. Final price confirmation with movement below 1,370.58.

As each condition is satisfied my confidence in a trend change would increase. When all conditions are satisfied I would have confidence in downwards targets and this would be my only wave count.

Alternate Bullish Wave Count.

It is possible that we are and have been in a new bull market for a cycle degree fifth wave. Cycle waves should last from one to several years (as a rough guideline).

For this alternate downwards movement would be expected to begin soon for intermediate wave (4). This downwards movement must subdivide as a corrective structure, most likely a flat, combination or a triangle.

Intermediate wave (4) may not move into intermediate wave (1) price territory. This wave count would be invalidated with movement below 1,370.58.