21:14 BST - SPX End of Day Update

On the 3 Options set out on the 60 min counts page, the search  continues for the end of 5 waves up from the August low  to mark the end of minor 2 (or (i) of [c] of 2) on Option 1, the end of wave X on Option 2 or the end of wave [i] of C (or (i) of [iii] of A) on Option 3.

We made another new high for the rally from the August low, but the question remains whether that new high was the end of the rally from the August low or whether there is still more upside to come.

The problem for the immediately bearish case is that we haven't yet seen a clear 5 wave impulsive decline taking out any significant levels so the risk of further upside continues.

You can see the bigger picture into which the following zoomed in charts fit by going to the 60 min counts page where you'll find the 3 Options I'm following for the move down from the April 2010 high.

The first chart is labelled as if Option 1 is playing out and assumes that we topped at 1163.87:

Chart 1: SPX 1 min - 5 waves up from the August low, close up:

I don't especially like this count, but its valid and with all other possibilities for the immediately bearish case now eliminated, it'll have to do!

As I said above, the problem with the bearish case is that for some time, the only 5 wave declines we've seen have been quickly overlapped by what, until then, was assumed to be a 4th wave. This has meant that we're left having to count nested ones and twos down and these, in turn, have also failed. 

We saw the same situation today, and this has left the bear case with only the count shown above.

It may not be very attractive, but until we take out the high at  1163.87 it is feasible. The odds for this count would greatly improve if we take out the low at 1151.41.

Turning to the near term bullish count, this second chart is labelled as if Option 3 is playing out and assumes we still have more upside to come:

Chart 2: SPX 1 min - 5 waves up from August low still in progress:

For this count we have to stay above 1151.41 for it to remain valid. If this count is playing out, then a possible target area for the end of wave (v) would be around the 1173 level which is about the 78.6% retracement of the decline from 1219.80 and also the next higher Gann price level based on the 1039.70 low.

Don't forget the other possible way to count this which I mentioned in the intra day updates - today's high was only wave i of (v) and the decline we saw from there was wave ii. This would mean a potentially substantial rally coming in wave iii. At the moment, I think this count would be low probability since today's decline only retraced 38.2% of the rally from 1131.87, which is perhaps rather shallow for a 2nd wave, but also because it might make wave (v) somewhat out of proportion to wave (i) in the rally from the August low. However, we'll have to see how price action develops.

So, the levels I'm watching for now are 1163.87 and 1151.41. 

20:07 BST - SPX Update - wave v of (v) up?

Here's what I'm looking at on the near term bullish count where today's low was wave iv of (v). Unless we take out 1151.41 without a new high, this count remains on the table (wave [1] may have topped at 1158.50):

SPX 1 min - still in wave v of (v):

Note that on the immediately bearish count, 5 waves up from today's low could be wave (C) in a running or expanded flat for wave [2]  -  I mentioned  that as a possibility in the last post.

14:44 BST - SPX Update on the (1)-(2)-1-2 count

The options for the immediately bearish count are narrowing. This was my least favourite way to count the decline from today's high, but, other than a big expanded flat for wave [2], it may be the most likely bear count - its invalidated above 1158.72. In that case, the expanded flat wave [2] will be the bear count and its not pretty:

SPX 1 min - top in at 1163.87 or still in wave iv:

The move up from today's low could be counted as 5 waves for wave [1] of v on the alternate labelling on this chart and that possibility stands until we take out the low at 1151.41.

18:29 BST - SPX Update on the (1)-(2)-1-2 down

Referring to my last post, I'm not sure I like the depth of that wave 4 of (3) on the main count which assumes we topped at 1163.87.  The previous count isn't invalid, but  still, I've re-labelled the (1)-(2)-1-2 as shown below:

SPX 1 min - top in at 1163.87 or still in wave iv?

For this labelling, 1157.42, the wave (2) high, is the invalidation point.

17:45 BST - SPX Update: Top in at 1163.87 or still in wave iv of (v)..... or wave ii of (v)

The ending diagonal and the subdividing wave v of (v) have been eliminated, so the other possibilities mentioned in my previous post become the focus, namely, that we topped at 1163.87, or that we're still in wave iv:

SPX 1 min - top in at 1163.87 or still in wave iv?

The wave iv alternative count may be starting to look unlikley given its size in relation to wave ii, but strictly, its not invalidated unless we take out the wave i high at 1135.87.

The further alternative to this decline being wave iv of (v) is that its wave ii of (v), with today's high being wave i of (v) - something to watch out for, in my view. Its not invalidated unless we take out the wave (iv) low at 1131.87.

If we have topped, then we shouldn't have any difficulty taking out the 1131.87 low and that's the next target to watch for confirmation that some sort of top may be in. In the meantime, to the upside, if we're in wave 3 of (3) now, the next rally should be wave 4 and must stay below the wave 1 low at 1156.43.

15:34 BST - SPX Update: wave v of (v) subdividing or ending diagonal forming?

Here are two possibilities for the move from the 1131.87 low (the labelling on this chart assumes Option 1 on the 60 min counts page is playing out):

SPX 1 min - wave v of (v) subdividing or ending diagonal forming?

The main labelling implies a fair amount more upside. As mentioned in my previous post, one of the levels I wanted to see taken out was 1156.22. We just missed doing so, which means there is the possibility that wave [3] of v is subdividing.

The alternative count that I've labelled would be more limited: if the labels are correct for the diagonal, wave iii is 9.02 points so wave v has to stay below 1165.31, assuming wave v of the diagonal started at 1156.29. Taking out the black dotted line invalidates the diagonal.

The more bearish possibility is that today's high was the end of the rally and we're in the process of forming a larger impulse wave down - the odds of this would increase if we take out 1154.88 and make a clear 5 waves down in doing so. However, the possibility that a big expanded flat wave iv is still forming can't be ruled out - we'd just have to see what happens if and when we get 5 waves down.

14:48 BST- SPX Update

If we take out the high of wave [1] of v on the chart in my last post (its at 1158.41), before we make a new high above 1163.87, I'm going to start thinking today's high is the end of wave [5] of v, not [3] of v. The probability of that increases if we take out the low of wave [2] at 1156.22. However, I then want to see 1154.85 go too.

14:37 BST - SPX Update: Still looking for 5 waves up from 1131.87

With the high at 1162.76 taken out, the count that had yesterday's move as a 4th wave of some degree is now the focus. As mentioned in yesterday's updates, this was always the risk given that the market again did not put in 5 waves to the downside - the decline from the 1162.76 high was only 3 waves. 

So, with the re-labelling I mentioned might be necessary, this is how it looks (the chart is labelled as if Option 3 on the 60 min counts page is playing out, but you can see on that page what 5 waves up from the August low would mean on the more bearish counts under Options 1 an 2 on that page):

SPX 1 min - 5 waves up from the August low, close up from 1131.87 wave (iv) low:

The next Gann price level above 1156 is 1173 and that coincides with the 78.6% retracement level of the decline from 1219.80. The price range between 1156 to 1173 is an area to watch for price action that might suggest a top is in for the rally from the August low. 

However, as always, until we see an impulsive move to the downside that takes out a significant pivot, the risk of further upside remains. Currently, the level I'm focusing on is at 1154.85.