Here's a quick summary of the potential counts in play for the rally from the July low at 1010.91.
1) double zig zag:
SPX 1 min - double zig zag from 1 July:
As you can see from this chart (and from previous updates), its possible to count the double zig zag as complete at the 1020.95 high. The move from that high would be counted as nested ones and twos down. You can see close ups of this in the 1 min charts posted under Option 1 in last night's update.
However, as you can also see, we may only still be in wave (3) of [C] of the second zig zag (with wave 4 of (3) being what we have seen since the 1020.95 high). We need to take out the high at 1096.38 to exlcude this (see the 1 min charts under Option 1 in last nights update). If we do that, then its very likely that the double zig zag did top at 1020.95.
However, that doesn't necessarily seal the deal for the bearish case. It may be that its not a double zig zag, but only a single zig zag that has been playing out since the July low:
2) Single zig zag:
SPX 1 min - single zig zag from July low:
If this is what is playng out, then we're probably in wave (iv) of [c] of this zig zag, with wave (v) to come. We could only rule this out if we take out the wave (i) high at 1088.96 on this assumed wave (iv) pullback.
Even if we do that, it won't rule out the possibility that we're actually in an extending wave (iii) of [c]. I don't think that's the case since it would likely lead to a very large [c] wave which may not actually stay below the high that its supposed to be correcting (1219.80 on Option 3). However, its not impossible. It can only really be ruled out if we drop below 1065.25 before we make a new high.
You can see close ups of this count on the 1 min charts posted under Option 3 in last night's update.
In my view, that low, 1065.25, is a fairly important level to watch for the bearish case. It would not only scupper the alternative referred to above on the single zig zag count, but it would also severely damage the last potential count I have for the move up from the July low:
3) Impulse wave:
SPX 1 min - Impulse wave up from July low:
This count applies to the bullish alternative shown on the 60 min chart of Option 4 on the 60 min counts page. There, I've shown the move up from the low marked [ii] as a (i)-(ii)-i, but on the above chart, I show the other possibility that its all part of (i) of [iii].
To rule out the count shown on the above chart, we need to drop below 1088.96 in this assumed wave iv. In that case, the count on the 60 min Option 4 bullish alternative chart would come into play. That would be invalidated if we take out the 1065.25 low. That would lead to a very high probability that this bullish count isn't playing out.
However, we couldn't rule out the possibility that we are in wave [iii] up until we take out 1056.88, the wave [ii] low. Even then, it may just be wave [ii] is forming an expanded correction. This would only be eliminated if we take out the July low at 1010.91.
So, that's the summary with the levels to watch. At the moment, the markets are set up to go either way. We just have to take it one step at a time and watch the important levels until the market rules out whatever counts we may be following.