22:11 BST - SPX Update

Although today's action did not eliminate the Counts I was following that had us in a 4th wave correction of some degree (Counts 2 and 5), the retracements were deep enough that I have now dropped those Counts. That leaves Counts 1 and 4 mapping the decline from 1131.23.  Count 1 has us in a deep 2nd wave retracement of the 5 wave decline from 1131.23, while Count 4  puts us in a (1),(2),i,ii down from 1131.23 and so in a shallower 2nd wave retracement of the decline from 1082.60, the start of wave i.

The Options listed below are the different ways to count the move down from 1219.80. There are 5 that I'm following and they are set out on the 60 min counts page. 

On the chart of each Option I have labelled one of the 2 remaining Counts  for the decline from 1131.23. Each of these Counts could apply to any one of the Options, though what they mean may differ depending on which Option you are looking at. 

Here's how things stand after today:

Option 1 - Wave (ii) of [iii] topped at 1131.23

9 min chart:

I've applied Count 1 to the chart of this Option. It assumes that we completed 5 waves down from 1131.23 at the low of 1010.91. From that low, I've labelled the double zig zag count that I was posting earlier (an up to date chart can be found at the end of this post).  

It puts us in the [C] wave of the second zig zag from 1010.91. Its possible that today's high marks the end of the second zig zag, or that the late day rally is the end of it, with a truncated 5th wave within [C] (the Dow made a new high but SPX did not) or we may have one more high to go to complete wave [C].

We are right at the bottom of the gap I mentioned yesterday, which starts at 1071 and ends just above 1074. Its also a 50% retracement of the decline from 1131.23, so it wouldn't be surprising if we turn back down here given a complete, or nearly complete, wave count.

Option 2 - Wave [ii] topped at 1131.23

9 min chart:

I've applied Count 1 to the chart of this Option also, so the comments made in respect of Option 1 apply here too.

Option 3 - Wave [iv] of an ending diagonal completed at 1131.23

10 min chart:

As posted earlier today, I've also applied Count 1 to the chart of this Option, giving us 5 waves down from 1131.23 to 1010.91.

Remember that for this Option to remain valid, we need to stay above 999.83 for the 5th wave of the leading diagonal and so far, we have. 

So, the main labelling from the 1010.91 low is now the bullish possibility that those 5 waves down complete wave [v] of a leading diagonal down from 1219.80 and, therefore, minor wave 1.  It places us now in minor wave 2. I've labelled the start of 5 waves up from the 1010.91 low, on the assumption that we will get a zig zag type move up for wave 2, since we  would be retracing the whole decline from 1219.80, not just the drop from 1131.23.

The alternate labelling assumes that the 5 waves down from 1131.23 is only wave (a) of [v] and that we are now retracing back up in wave (b). The double zig zag count I posted today would apply to the (b) wave.

Option 4 - Wave [b] of minor Y within intermediate [X] topped at 1131.23

15 min chart:

I've applied Count 4 to the chart of this Option. It puts us in an extending 3rd wave down from 1131.23. 

We've now retraced over 78.6% of wave i of (iii) - if we are in ii of (iii), this would be a good place for the rally to end

The retracement can't exceed 1082.60 if this count is correct. If it does, it'll be likely that Count 1 is in operation (see chart of Option 1 above).

Option 5 - Minor wave X within intermediate wave [X] topped at 1131.23. Now in minor Y down

9 min chart:

On the chart of this Option I've also applied Count 4, so the comments made in respect of Option 4 also apply here.

Here is the double zig zag count that I've applied to the charts of Options 1, 2, 4 and 5 and which would apply if the alternative labelling on Option 3 is in force:

Double zig zag:

As mentioned above, it may be complete at today's high, (which is how I've labelled it for the time being) or with a truncation at today's close, or we may have a little more upside to go to avoid a truncation (the way its labelled on the charts of the Options above caters for the latter two possibilities).

19:23 BST - SPX Update

I've changed the chart of the double zig zag back to the way it was labelled in last night's update, so showing the completion of the double zig zag at today's high. However, it would be more convincing if we could take out the high at 1051.01 that I had labelled as wave (1) of [C] in this morning's chart of the double zig zag without making a new high first. Until then the risk remains that this morning's labels are correct and that we are still in wave (4) of [C] with a further new high to come. Here's the chart:

SPX 1 min chart - double zig zag:

16:59 BST - SPX Update

Just updating  the SPX double zig zag chart I posted earlier. If this isn't just a 4th wave before another rally. we have to take out the wave (1) high at 1051.01. That will likely mean that we completed 5 waves up for wave [C] at today's high, with the 5th wave extending from where I have marked wave (2) (as in the chart I posted in last night's Update):

SPX 1 min chart - double zig zag:

15:08 BST - Dollar Update

This looks like an interesting possibility for an end to the decline in the dollar - an ending diagonal for wave v of [iv] of minor 3:

Dollar 60 min:

 

If its right, there's still room for wave [5] of the ending diagonal to move lower, as long as it doesn't exceed the length of wave [3], so watch out for the possibility of a new low. Moving above the wave [4] high should mean the diagonal is complete.

14:49 BST - ES and SPX Update

Well, on ES it looks like 5 waves up to 1067.75 from the low I marked as (4) of [C] on the chart posted earlier. On this count, it should mark the end of the zig zag - let's see - it could be taken out pretty quickly!

ES 5 min chart:

The SPX could be a complete 5 up from the [B] wave low on this double zig zag count, if it had an extended wave (5), or it could have another high to go - if the futures have topped its likely SPX has too - at least for today (we have hit the bottom of the gap I mentioned last night):

SPX 1 min - double zig zag:

11:35 BST - SPX and ES Update

In last night's Update I showed a double zig zag count for the move up from 1010.91. On that count, we'd be looking for 5 waves up from the low marked [B] at 1039.93. My labels showed a complete 5 from that level, but the alternative is that we are only in the 3rd wave of 5 to complete wave [C] of the second zig zag.

An alternative is a single zig zag from the 1 July low which puts us well into wave [C] to complete the zig zag. Here it is on a 1 min chart:

SPX 1 min chart - single zig zag from 1 July low:

Obviously, on this count, we need to see 5 waves up from the [B] wave low at 1018.35, whereas the double zig zag count requires 5 waves up from the [B] wave low at 1039.91. If, on the double zig zag count, we're only in the 3rd wave of 5 a wave move, there could be quite alot more potential upside to go if the 3rd wave extends as it probably should. The single zig zag count anticipates less upside.

The single zig zag count is what I have now labelled on the futures also. Here it is on a 5 min chart:

ES 5 min chart:

11:01 BST - SPX Update

I've re-labelled the chart of Option 3 - this has us either having completed a leading diagonal down from 1219.80 at the low of 1010.91, or, as you will see from the chart below, still in wave [v], which is forming a zig zag:

SPX 10 min chart Option 3: Leading Diagonal From 1219.80:

I've applied Count 1 (see last nights SPX Update) to the chart, which shows a complete 5 waves down from 1131.23 at the 1 July low. This would either be wave [v] of the leading diagonal, completing minor wave 1 down, or it would be wave (a) of wave [v], putting us now in the (b) wave. If the latter is correct, remember that we have to stay above 999.83 in wave [v] for the leading diagonal to remain valid.

The Dow and the Nasdaq Comp can also be counted in the same way from their April highs.

And here is the way I would count the rise from the 1 July low if we have started a minor wave 2 rally (if it s a (b) wave within wave [v], then the corrective counts shown on the charts of the other Options (see last night's Update) would apply):

SPX 1 min chart - Impulse form 1 July low:

Obviously, the 1 July low at 1010.91 is crucial to the validity of this count, but an early indication that it may be wrong may come if we take out the high of wave (1) of [3] at 1045.37 without completing 5 waves up from the low marked [2].