Elliott Wave chart analysis for the S&P 500 for 10th May, 2011. Please click on the charts below to enlarge.
Upwards movement invalidated two of our hourly wave counts leaving only one from yesterday’s analysis valid. This is not the only valid possibility though and, until we see movement above 1,370.58, we shall not have confirmation that upwards movement is a third wave.
Today the main hourly wave count expects that upwards movement is wave 3 green. This wave count is supported by MACD on the hourly chart and that is why it is a preferred wave count today.
Wave 5 blue is an incomplete structure; it requires new highs before it can be considered complete. Wave 3 pink within this fifth wave is extending and so we may expect the trend to remain up for at least a few more weeks.
If the main hourly wave count is correct then we may see the third wave move price into the upper half of this double wide parallel channel.
We should expect price to be contained by this blue parallel channel while wave C black continues.
At 1,564.02 wave C black will reach equality with wave A black. At 1,553.42 wave 5 blue will reach equality with wave 3 blue. This is our target for upwards movement to end.
Main Hourly Wave Count.
On the hourly chart MACD is trending higher as price trends higher and there is no divergence between the two. This agrees with this wave count.
Ratios within wave 1 purple of wave 3 orange are: wave 3 aqua has no fibonacci ratio to either of 1 or 3 aqua and wave 5 aqua is just 0.49 points short of 0.382 the length of wave 3 aqua.
Within wave 3 purple of wave 3 orange wave 3 aqua is 1.16 points short of equality with wave 5 aqua. At 1,359.71 wave 3 purple will reach equality with wave 1 purple and wave 5 aqua within wave 3 purple will be just 0.49 points short of 0.382 the length of wave 3 aqua.
In the short term, before we see upwards movement for wave 5 aqua, any further downwards movement for wave 4 aqua may not move into wave 1 aqua price territory. This wave count would be invalidated by short term movement below 1,354.95.
When we have a little more upwards movement for wave 5 aqua then the invalidation point must be moved to 1,349.44. Wave 4 purple may not move into wave 1 purple price territory.
Wave 3 green must move beyond the start of wave 1 green. This wave count may be considered confirmed with movement above 1,370.58.
If price moves below 1,349.44 then we may uses the alternate wave count below.
First Alternate Hourly Wave Count.
It is still possible that wave 2 green is incomplete and this possibility will remain while price remains below 1,370.58.
If price falls below 1,349.44 tomorrow without making a new high then we may use this wave count.
Wave B orange is a complete zigzag and wave C purple is just 1.33 points short of equality with wave A purple.
At 1,324.94 wave C orange would reach equality with wave A orange. This is very close to the 0.618 fibonacci ratio of wave 1 green at 1,323.69. This is our target for downwards movement to end.
Wave 2 green may not move beyond the start of wave 1 green. This wave count is invalidated with movement below 1,294.70.
Second Alternate Hourly Wave Count.
If we see a little upwards movement before price turns back down and moves below 1,349.44 then we shall use this wave count.
Wave B orange is here labeled as an expanded flat correction and wave B purple is a 154% correction of wave A purple.
Wave C purple will reach 2.618 the length of wave A purple at 1,360.46.
Within wave C purple wave 3 aqua is 1.33 points short of equality with wave 1 aqua. At 1,361.82 wave 5 aqua would reach 0.236 the length of wave 3 aqua.
When we have one more upwards wave to complete wave C purple and so wave B orange then the S&P would be due for a five wave structure downwards for wave C orange.
Wave 2 green may reach down to the 0.618 fibonacci ratio of wave 1 green at 1,323.69.
Wave 2 green may not move beyond the start of wave 1 green. This wave count is invalidated with movement below 1,294.70.