Elliott Wave Analysis of the S&P-500 (SPX) by Sid from ElliottWavePredictions.com

Elliott Wave Analysis of the S&P-500 (SPX) by Sid from ElliottWavePredictions.com. Click on the chart twice to enlarge.

The Nasdaq-100 (NDX) index took out its 2011 highs late last week already, and the Dow Industrials moved a tick above its July 7 2011 high today, confirming in my mind that there was, in fact, 5 waves up from the March 2009 low through the July 7 2011 high, and that since then we are most likely seeing an expanding or running flat for cycle (teal) wave 2 in several of the US equity indices. This would allow for a new high above the 2011 highs for burgundy B, but requires initially (for the lagging S&P-500) that Burgundy Wave B retrace at least 90% of what must have been an ABC move down from July 7 thru Oct 4. This means that in order to follow suit with the Nasdaq and Dow, the SPX must reach at least 1328.31, and I think now that it will within a few days, but not in a straight line. Over the next two days (thru Wed 1-25) we are likely to see a mild choppy down move for wave 4 green, and then wave 5 green to the upside may manage to endure through the end of the month (Jan 31), reaching the aformentioned minimum target of 1328.31, or slightly higher. Based on the highly extreme current bullish sentiment, and some Fibonacci turn dates just ahead (1-25 and 1-31), along with a more-than-stretched-out MACD divergence condition (see chart), and a VIX sell signal at the NY close today, I still think we are within a very few days of the start of a significant move to the downside, likely eventually testing the the late November low of 1158 at a minimum, thereby potentially completing Primary (burgundy) wave C of a running flat for Cycle (teal) wave 2.

The best alternate count now is that March 2009 thru July 7 2011 was Cycle wave 1 (teal), followed by a wave 2 teal that was unusually brief and shallow through Oct 4, and since then we have a very bullish 1-2-1-2, which would likely take the SPX to 2190 within the next 2-3 years. (2190 is where wave 3 teal would equal 1.618 times the length wave 1 teal was). However, this would mean that starting Dec 19, the SPX would be in wave 3 of 3 of 3 to the upside, which according to R.N. Elliott, should be confirmed by an accompanying strong uptick in volume. Quite to the contrary, the move up since December 19 has melted upward on low volume. This is the biggest reason why an ultra bullish 1-2-1-2-1-2 scenario since March 2009 is ranked as my alternate count at this time, and not the main.