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Last analysis had two hourly wave counts. I had expected price to break out of its small zone and provide some clarity by invalidating one of the two wave counts. This did not happen and both wave counts remain valid. However, the alternate has reduced in probability a little.

Click on the charts below to enlarge.

S&P 500 daily 2013

This wave count has a higher probability than the bullish alternate. Upwards movement over the last 4 years and 10 months subdivides best as a zigzag. 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.

Minor waves 1, 2 and 3 are complete. Minor wave 4 is either incomplete and may continue for another one or two days having no Fibonacci time relationship (main hourly wave count), or it was over 1,823.73 and lasted a Fibonacci five days (alternate hourly wave count).

We may be about to see a larger fractal at minor wave degree of the structure within minor wave 1 at minute wave degree; there the first wave was extended, the third wave was shorter, and the fifth wave was shorter still.

Intermediate wave (3) is just 0.76 points short of 2.618 the length of intermediate wave (1). We may not see a Fibonacci ratio between intermediate wave (5) and either of (3) or (1).

Intermediate wave (1) lasted 18 days. Intermediate wave (5) may last a total of a Fibonacci 89 days which would see it end on 10th February, 2014. However, Fibonacci time relationships are not very reliable for the S&P. This is a rough guideline only,

At super cycle degree the structure is an expanded flat correction. Within the flat the maximum common length of cycle wave b is 138% the length of cycle wave a, and this is achieved at 1,858.03. When cycle wave b is longer than the common length of cycle wave a then the probability that an expanded flat is unfolding would reduce and it would be more likely that a long term bull market is underway. Above 1,858.03 I will swap this main wave count over with the bullish alternate.

Main Hourly Wave Count.

S&P 500 hourly 2013

Minute wave y is still incomplete. Within it minuette wave (c) must complete as a five wave structure downwards.

This wave count expects downwards movement for another one or two days, and should see an increase in downwards momentum on Monday.

The target remains the same. At 1,821 minuette wave (c) would reach 2.618 the length of minuette wave (a). This target would see minor wave 4 move mostly sideways, and slightly lower. If the target is incorrect it may be too low. Minor wave 4 as a double flat should have an overall sideways look to it.

Within minuette wave (c) subminuette wave ii may not move beyond the start of subminuette wave i. This wave count is invalidated with movement above 1,843.23 in the short term.

When minuette wave (c) is a completed five wave structure then this upper invalidation point will no longer apply and upwards movement would be expected.

Movement below 1,830.38 would provide some confidence for this wave count. At that stage the alternate below would be invalidated.

Minor wave 4 may not move into minor wave 1 price territory. This wave count is invalidated with movement below 1,811.22.

S&P 500 5 minute 2013

Alternate Hourly Wave Count.

S&P 500 hourly 2013

If the main hourly wave count is invalidated tomorrow with movement above 1,843.23 then this alternate would be a good explanation.

Minor wave 4 may have been over in five days as a double flat correction. There are, however, a few problems with this wave count and it has a lower probability than the main hourly wave count.

Minute wave y in comparison to minute wave w is very brief. Also, minute wave y ends lower than minute wave w and the whole structure of this possible double flat has a downwards slope and look, not sideways which is what double flats should look like.

If minute wave iii has begun then the first wave within it may be unfolding as a leading diagonal. While this is entirely possible leading diagonals in first wave positions are not exactly common, and within the first wave of a third is less common. This further reduces the probability of this alternate.

If price moves above 1,843.23 on Monday then this would be my main wave count, and I would expect price to continue upwards.

At 1,853 minor wave 5 would reach 0.382 the length of minor wave 3.

At 1,900.63 minor wave 5 would reach equality with minor wave 3. This is the maximum allowable length for minor wave 5 because minor wave 3 may not be the shortest wave.

Within minute wave iii no second wave correction may move beyond the start of its first wave. This wave count is invalidated with movement below 1,830.38.

*Note: I have looked for another alternate idea, that minute wave ii is not over and sideways movement for Friday’s session could have been part of this second wave correction. The subdivisions could fit, and it would see the second wave incomplete and requiring the completion of a five down. Thus this idea would hardly diverge from the main wave count. But the reason why I will not publish this idea is it would see minute wave ii much longer in duration and out of proportion to minute wave i. This idea does not have the “right look”.

Bullish Alternate Wave Count.

S&P 500 daily alternate bullish 2013

It is possible that a new cycle degree bull market began at 666.79. So far it is not yet halfway through, and I would expect it to last for a few years (at least five more years and probably longer).

The current upwards impulse, labeled intermediate wave (5) for the main wave count and minor wave 5 for this alternate is incomplete. The structure within the final fifth wave is the same, and the structure on the hourly chart is the same. Targets would be the same for this bullish wave count. This wave count does not diverge with the main wave count, and it will not for several weeks or a couple of months or so yet.

The maroon – – – channel is an acceleration channel drawn about primary waves 1 and 2 on the monthly chart (it is drawn in exactly the same way on the main wave count, but there it is termed a corrective channel). I would not expect intermediate wave (2) to breach this channel because a lower degree (intermediate) wave should not breach an acceleration channel of a higher degree (primary) first and second wave.