I have main and alternate wave counts to show today for the S&P-500. The main count was first presented here in the August 9 2011 post, except that the Burgundy wave B has been drawn out and expanded ridiculously by an unprecedented level of central bank manipulation of the markets. It shows that Burgundy wave B is very close to completion.
The alternate count expects that the balance-sheet-busting level of fed intervention has pushed the market into an even more unnatural bubble condition, with further up to go. Ironically, th more bullish (at least for several more months) alternate count allows for a far deeper crash after the bubble bursts than anything that would have been possible if the main count had been allowed to unfold more naturally. First, here’s the main count on quarterly, weekly, and 240-minute charts:
Now, the “bigger bubble, bigger burst” alternate count on quarterly, weekly, and 240-minute charts:
If the S&P moves above 1530.58, the alternate count will become the main. It would be very rare that a wave B of an expanded or running flat would extend past 1.618 the length that wave A was, although it is theoretically possible that it could be up to twice the length. If the S&P runs out of steam before hitting 1530 and moves below 1465.47, the alternate count would be invalidated.
The diminishing volume since the 2009 low is strong evidence that the subsequent choppy overlapping upward movement is a B wave. Ever shrinking volume is never a characteristic of a wave 3 at minor (blue) degree or above.