21:11 BST - SPX End of day Update

With the further new high for the rally from the August low, the main bearish count is now the diagonal from that low that I showed in my last post. Here it is updated to today's close:

Chart 1: SPX 60 min - diagonal from August low:

This would be an ending or leading diagonal, depending on which of the bigger picture options is in play (as to which, see the 60 min counts page - the chart above assumes its Option 3).

Here's a close up of Chart 1 from the wave (ii) low (its labelled as if Option 1 is playing out):

SPX 1 min - close up of diagonal from August low:

As mentioned in the earlier post, the limit for wave (v) is 1192.52 because wave (v) must be shorter than wave (iii).

On this labelling, taking out 1155.71 would suggest that the diagonal is complete, but an earlier indication might be taking out the b of wave (v) low at 1162.55. Its possible that wave (v) should be labelled as a w-x-y complete at today's high (or with one more high to come) and taking out the low I've labelled as wave b would probably confirm that.

Here's the more bullish count which has us in a subdividing wave v of (v):

SPX 1 min - impulse up from the August low:

Taking out 1155.71 at this stage would make this count unlikely unless wave [2] can still be considered to be in progress. Really, on this count, the low at 1151.41 needs to be taken out to eliminate it. 

I've noted that wave v may be forming a diagonal - if today's high was wave [3], it was just shorter than wave [1], so this remains a valid possibility. I've drawn in the lines for the diagonal. If we're in wave [4], we need to stay above the dotted blue line if a diagonal is playing out.

However, remember the much more bullish possibility I have been mentioning over the last several days, that the high at 1163.87 was wave i of (v) and the low at 1151.41 is wave ii, which puts us now in wave iii of (v). We'd really have to take out 1131.87 to eliminate this, but taking out 1151.41 at this stage would probably render this count less likely.

So, the levels I'm watching are 1162.55, 1155.71 and 1151.41.

18:22 BST - SPX Update - whole of the rally from the August low as a diagonal

Here's a count that will accommodate new highs for the rally from the August lows but is less bullish than the bullish possibilties I set out in yesterday's end of day update - its a revival of a previous count that has the whole of the rally from the August low as an ending diagonal:

SPX 60 min - ending diagonal from August low:

This labelling limits the upside, if there is more to come, to 1192.52 in order for wave (v) to remain shorter than wave (iii).

Wave (iv) may have more downside to come, but it has to stay above the dotted blue line.

17:57 BST - SPX Update: possible count for corrective move from today's low - but it counts as an impulse too

The move up from today's low could count as an impulse or a correction, so no help there. Here it is as a corrective W-X-Y:

SPX 1 min - ending diagonal from 1131.87:

So, nothing to do but to continue to watch 1167.95 and 1155.71.

16:40 BST - SPX Update on the bearish counts

Once again, after a promising start, the bear counts aren't following through. With a little juggling of the labels, I can label 5 waves down from the end of a revised version of the ending diagonal from Chart 1 in yesterday's end of day update:

SPX 1 min - ending diagonal from 1131.87:

The diagonal has a truncated [C] wave within wave v, but wave v did end above wave iii, so no rules are broken.

On the count for an impulse wave up from 1131.87, the drop from 1168.68 could be re-labelled as shown in the chart below:

SPX 1 min - impulse from 1131.87:

Its not great since wave 1 is large in relation to the higher degree wave (1).

Both of these counts are invalidated above 1167.95, which would make new highs for the rally from the August low very likely. To the downside, I'm watching 1155.71 - while we remain above that, the risk of new highs remains the most likely outcome.

15:20 BST - SPX Update on the impulse from 1131.87

Here's Chart 2 from yesterday's end of day update, brought up to date with today's action. If we completed an impulse up from 1131.87 at the 1168.68 high, I've shown an alternate way to label the decline from there which puts us in wave (4) of [1] down currently. This wave would have to stay below the low labelled (1) at 1164.30 for the immediately bearish count to remain valid:

SPX 1 min - impulse from 1131.87 complete?:

The alternate labelling of a subdividing wave v of (v) will only be invalidate below 1151.41.

15:05 BST - SPX Update - Ending diagonal in Chart 1 from yesterday's end of day update confirmed as complete...but

As mentioned in yesterday's end of day update, the first reference point I was watching that might suggest an end to the rally from the August low was the black dotted line on Chart 1 in that update. Well, we've taken it out today so that rules out the possibility that the diagonal I have labelled on that chart is continuing as shown by the alternate labels:

SPX 1 min - diagonal from 1131.87:

So, if the move up from 1131.87 was a diagonal, it must now be complete. 

However, that doesn't guarantee an end to the rally from the August low. As shown in the other charts I've been posting, we may have had an impulse wave up from the 1131.87 low, in which case, the risk of further upside remains. The next level I said I'd be watching is 1151.4, which relates to the possible impulse counts shown on Chart 2 in yesterday's end of day update. If that level can get taken out, then its all eyes on 1131.87.

In the meantime, the immediately bearish argument would be strengenthed if the current move up from today's low could stay below the low I've labelled wave 1 of (3) at 1162.02 if the labelling I've shown is correct.