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 rally from 1343 has certainly been aggressive, and has already broken slightly above the blue trend channel shown in the last post. While this doesn’t necessarily invalidate my main count (because wave 4’s often end just outside the channel), the fact that the up move from 1343 appears to be in five waves means that upward movement is very likely incomplete. If the wave count shown in my previous post is to remain legitimate, wave 4 blue cannot move into the price territory of of wave 1 blue (above 1405.14). Today’s chart shows how that could unfold without invalidation, with a likely target for the end of wave 4 blue retracing .618 of wave 3 blue at 1399.54. However, if there is any movement above 1405.14, the alternate count, also shown above, will become the main.

That alternate expects that from the October 18 top, wave one black of a bearish leading diagonal completed on Novemeber 16, and was a blue ABC zigzag. Even though a diagonal is a 5-wave affair, each of the 5 waves usually consists of a “three, not a “five”. Waves 2 and 4 of diagonals typcially retrace between .66 and .81 of the previous wave, so the target zone for the end of alternate wave 2 black is between 1423 and 1441. Wave 2 black would have to be a 5-3-5 zigzag, if the leading diagonal alternate count is to be correct.

I wouldn’t normally be talking about a leading diagonal at this early of a stage (before invalidation of the main non-overlapping impulse count), but I really like the Oct 18 top as THE top for wave B burgundy, not only because of the exact (and most common) fibonacci relationship with wave A burgundy, as discussed in the November 6 post, but also due to the multiple MACD divergences associated with that top when viewing weekly candles, as shown in the October 28 post. I am therefore highly likely to remain bearish in my intermediate-term wave interpretations as long as the S&P remains below 1464.02.