I had expected upwards movement with some increase in upwards momentum for Thursday’s session. This is not what happened. Price moved lower and the session ended with a red candlestick on the daily chart.

I have a new alternate wave count for you today.

The wave counts remain the same.

Click on the charts below to enlarge.

Main Bearish Wave Count.

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.

Within intermediate wave (5) I have today moved the labeling down one degree. We may have just seen minor wave 1 complete. The pink channel is drawn about minor wave 1 using Elliott’s first technique: draw the first trend line from the highs of minute waves i to iii, then place a parallel copy upon the low of minute wave ii. I would expect minor wave 2 to breach this channel. Minor wave 2 may find support about the upper edges of the black and maroon – – – channel.

Minor wave 2 may not move beyond the start of minor wave 1. This wave count is invalidated with movement below 1,646.47.

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.

S&P 500 hourly 2013

So far to the downside there is only a three wave structure. This may be minuette waves (i) through to (iv) within a five wave impulse for minute wave a. Within minute wave a minuette wave (iv) may not move into minuette wave (i) price territory above 1,846.49. If price remains below 1,846.49 and moves lower tomorrow then minute wave a would be a five wave structure.

If minute wave a subdivides as a five then minor wave 2 would be unfolding as a zigzag. Within the zigzag minute wave b may not move beyond the start of minute wave a. This wave count is invalidated with movement above 1,850.84.

Alternatively, if price moves above 1,846.49 tomorrow then minute wave would be complete as a three wave structure and a new price extreme above 1,850.84 would be possible. Minor wave 2 may be unfolding as a flat correction (or the first structure in a multiple may be a flat).

I would expect minor wave 2 to be longer duration than any of the corrections at minute wave degree within minor wave 1. The longest was minute wave iv which lasted 10 days. Minor wave 2 should last longer than 10 days.

S&P 500 hourly 2013

Bearish Alternate Wave Count.

S&P 500 daily 2013

It is again possible that cycle wave b is over (and the same idea applies for the bullish wave count below as it is possible that intermediate wave (1) is over).

It is possible that we have just seen a big trend change. For this bearish wave count the new downwards trend is at cycle degree. It should last between one to several years and should take price substantially below 666.79.

It is always wise to assume that the trend remains the same until proven otherwise. While price remains above 1,646.47 we should assume the trend remains up and this will be an alternate wave count.

If downwards movement breaches support at the black and maroon – – – channels then this wave count would increase in probability. If we see a clear five wave structure downwards on the daily chart this would become my main wave count. Movement below 1,646.47 would confirm a trend change, at least at intermediate wave degree.

Within cycle wave c no second wave correction may move beyond the start of its first wave. This wave count is invalidated with any movement above 1,840.84.

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.

When intermediate wave (1) is completed then this alternate also expects a trend change. Intermediate wave (2) downwards should last several weeks to a couple of months or so, and should breach the lower edge of the wide blue channel here on the daily chart.

Intermediate wave (2) should not breach support at the lower edge of the larger maroon – – – channel which is drawn the same way for both wave counts. For this alternate intermediate wave (2) should not breach the lower edge of the acceleration channel drawn about primary waves 1 and 2, one degree higher.