21:21 BST - SPX Update

On the counts that imply the rally from the 1 July low is a corrective one (Options 1, 2, 4 and 5) I've labelled completed double/single zig zags ending with a truncation at 1099.08, followed by 5 waves down to yesterday's low at 1056.88, with today's high being the end of a corrective rally in the form of a double zig zag. 

If correct, then for Options 1 and 2 we would be in a 3rd of a 3rd wave down at various degrees - both very bearish. For Option 4, we would be in wave (iii) of [c] of minor Y down - temporarily bearish. For Option 5, we would be in (iii) of [c] of minor Y down - again, temporarily bearish.   

On the count that places us in a 5 wave move off the 1 July low (Option 3), which would be part of a larger correction up,  I've labelled the high at 1099.46 as wave (iii) followed by  wave (iv) down to yesterday's low at 1056.88. The rally from there is labelled as wave i of (v) of [a] up.

The Options 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. 

The question whether the rally from 1 July has completed a corrective move or whether its only all (or maybe, part) of a larger correction up remains to be answered.

Here's how things stand after today: 

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

15 min chart:

Five waves down from 1131.23 on this Option represents wave i of (iii) of [iii] of minor 1. The double zig zag I have labelled from the 1010.91 low would be wave ii of (iii), so implies that we are now in a wave iii of (iii) decline.

I've labelled a complete 5 wave decline from 1099.08 to yesterday's low at 1056.88 to complete wave [1] of iii of (iii) down, followed by a double zig zag to today's high at 1088.96 for wave [2] of iii..

The 1099.08 high remains the invalidation point for the completion of wave ii on the double zig zag as labelled.

If we are in a 3rd of a 3rd decline at several degrees of trend as suggested by this count, we need to see price action behave in a manner consistent with that - steep declines with little opportunity to get on. We've probably yet to see this. However, taking out yesterday's low at 1056.88 would be a good start, but we then need to see the July low at 1010.91 taken out pretty quickly.

Until then, the bullish count in Option 3 remains viable, as do other less bullish possibilities, such as a continuing wave ii or (ii) correction (see the 60 min counts page).

Option 2 - Wave [ii] topped at 1131.23

15 min chart:

For this Option, five waves down from 1131.23 represent wave (i) of [iii] of minor 1 down. The double zig zag up from 1010.91 would be wave (ii) of [iii], so, assuming its complete, we would be in wave (iii) of [iii] down.

This is the same labelling as on the chart of Option 1 for the rally from 1 July and subsequent decline (although the wave degress are different), so the invalidation point is  the same and the same comments made in respect of that count also apply here.

Option 3 - Ending diagonal complete at 1010.91

15 min chart:

For this Option, 5 waves down from 1131.23 to 1010.91 could be  wave [v] of a leading diagonal down from 1219.80 and, therefore, minor wave 1.  

It places us now in minor wave 2 up.  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.

I'm showing us having completed wave (iii) (at 1099.46) of what I'm assuming at the moment will be a 5 wave move for wave [a] of minor 2.  This would mean the pullback to yesterday's low was wave (iv) of [a].

I've labelled the rally from there as wave i of (v) and the pullback from today's high would be wave ii. It has to stay above 1056.88 for this labelling to remain valid. Falling below that low wouldn't rule out a continuing wave (iv), but it might be less likely and require a review of this bullish count.

The alternate labelling assumes that the 5 waves down from 1131.23 is only wave (a) of [v] and that the retracement back up was wave (b). Assuming its complete, we'd now be in wave (c) down and the count shown on the charts of the other Options would likely be in effect.

Remember, if there is further downside  to come, we must stay above 999.83 for the leading diagonal count to remain valid. 

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

15 min chart:

For this Option, 5 waves down from 1131.23 would be wave (i) of [c] of minor Y and the double zig zag up from 1010.91 would be wave (ii) of [c].

However, as mentioned previously, counting a complete 5 waves down to 1010.91 does bring in the possibility that wave [c] of Y is done so we have also completed intermediate wave (X) - see the 60 min counts page. That would put us now in a minor wave A rally and eventually take us to new highs. If wave (X) did end at 1010.91, then the impulse wave I have labelled on the chart of Option 3 would apply here.

For the moment, I've assumed we are starting wave (iii) of [c] down  from  the 1099.08 high. The 5 waves down to yesterday's low would be wave i of (iii)  of [c] and the rally to today's high would be wave ii. We ought now to be in wave iii of (iii) of [c].

The invalidation point is the same as for Options 1 and 2, though a continiung wave (ii) correction wouldn't be ruled out unless we take out 1131.23.

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

15 min chart:

On this Option, 5 waves down to 1010.91 would be wave [a] of minor Y down and the retracement would be wave [b]. If its over, we would now be headed down again in wave [c] to complete minor Y.

I've labelled a single zig zag on this chart for wave [b], but its end point is the same as for Options 1, 2 and 4, namely, the high at 1099.08, so that would be the beginning of wave [c]. 

I'm counting the 5 waves down from that high to yesterday's low as wave (i)  and today's high as wave (ii) of [c]. The same invalidation point stated for  options 1, 2 and 4  applies here, but again, it wouldn't rule out a continuing wave [b] correction unless 1131.23 is taken out.

Here's an update of the chart 've been posting today looking at the action from today's high (the charts above provide the context for this close up):

SPX 1 min:

The degree labels for the main count used relate to Option 2. Although I have shown wave [1] of iii down complete at today's low, its possible we haven't yet completed it, but in that case, it may not be far off completion, so we'd have to expect a wave [2] rally fairly soon.

The alternate labelling relates to Option 3 above. The low at 1056.88 remained intact so this count is still on.

So, the bearish Options (1, 2, 4 and 5) look to be in better shape after today. However,  the bullish Option (Option 3) remains very much on the table. The levels to watch are 1099.08 and 1056.88 - although a break of these levels will not completely eliminate the bullish or bearish Options, probably only requiring a review of the count, the risk of the bullish count playing out increases above 1099.08 and the risk of the bearish count playing out increases below 1056.88.

19:24 BST - SPX Update

The bearish count looks a whole lot better now, but the bullish count remains in play with some relabelling as shown below (by the way, please refer to the chart of Option 2 for the larger picture of the bearish count - its a proxy for the other three Options which also have this bearish count - and the chart of Option 3 for the larger picture of the bullish count):

SPX 1 min - today's action:

For the bullish count, we've reached a 50% retracement of wave i - a 61.8% retrace is at about 1069. This count is invalidated below 1056.88. 

For the bearish count, its invalidated above today's high.

17:43 BST - SP X Update

Bullish count: we've started wave iii of (v) up from today's low. Bearish Option: from today's high we've had (1) down and an expanded flat for wave (2).

The bullish count will be invalid as labelled if we drop below today's low; the bearish count is invalid as labelled above today's high.

SPX 1 min chart - today's move:

 

16:15 BST - SPX Update

We could be at the start of wave iii of (iii) of [iii] down on the bearish Options, 1,2,4, and 5, or just in an [A]-[B]-[C] wave ii of (v) retracement on the bullish Option 3. Here's a close up on a 1 min chart showing the bullish and bearish counts for the decline from today's high:

SPX 1 min - count from 1088.96:

15:03 BST - SPX Update

If we're in an impulse wave up from the 1056.88 low, then today's high could be the end of the 1st wave of that impulse - this is the count I have on the chart of Option 3. Here's the 1 min chart showing the move up from yesterday's low:

SPX 1 min chart - impulse wave:

To negate the impulse wave count, we need to take out 1056.88, Taking out the wave [3] high at 1078.24 would be a start since it would eliminate the possibility that this current pullback is a 4th wave within an extending wave [3]. But only taking out 1056.88 will end this count.

If we completed a double zig zag up from 1056.88 at today's high, (see Options 1,2,4 and 5) taking out the wave (B)  of [Y] low at 1074.25 will increase the odds that the rally from yesterday's low is over and that we should go on to take out yesterday's low. Here's a chart of the double zig zag:

SPX 1 min chart - double zig zag:

12:47 BST - SPX - Is a more sustained downtrend being signalled?

Just a quick look at the RSI (14) on the weekly and daily timeframes may be the confirmation that the bears are looking for, that we are more likely to be in for a sustained period of downward rather than upward movement in the markets.

Here's the weekly chart with the RSI in the window above price:

SPX Weekly RSI:

I've highlighted the behaviour of the RSI during recent bull and bear runs in the market. Clearly, it spends most of its time above the 50 level during a bull run and most of its time below the 50 level during a bear run.  

Looking at the far right of the chart, we seem to be seeing the RSI stuck largely below the 50 line since about early May, suggesting the current downtrend in the market could still have more to go.

Here's the daily:

SPX Daily RSI:

Obviously, the RSI is rather more volatile on this timeframe and its moves out of the bullish or bearish zone are deeper than on the weekly, so there's more scope to be whipsawed out of a position using the RSI alone. 

Still, since early May, its spent most of its time below the 50 line. Though its risen above 50 now, with the 50 day moving average having crossed below the 200ma, it suggests that RSI crosses above 50 may be only temporary in nature and not indicative of a change back to an uptrend.

The Bullish Percent line of the SPX is also behaving in a bearish manner - its been unable to recover above the 50 line and get back into the bullish zone, despite recent steep rallies. Its also below its 21 day moving average. This isn't bullish and seems more indicative of the beginnings of a sustained downtrend.

So, just a couple of things to keep an eye on as price action develops.

21:35 BST - SPX Update

On the counts that imply the rally from the 1 July low is a corrective one (Options 1, 2, 4 and 5) I've labelled completed double/single zig zags ending with a truncation at 1099.08, followed by 5 waves down to today's low at 1056.88, with today's rally being a double zig zag.

On the count that places us in a 5 wave move off the 1 July low (Option 3), which would be part of a larger correction up,  I've labelled the high at 1099.46 as wave (iii) and today's low as wave (iv)

The Options 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. 

The question whether the rally from 1 July has completed a corrective move or whether its only all (or maybe, part) of a larger correction up remains to be answered.

Here's how things stand after today:

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

15 min chart:

Five waves down from 1131.23 on this Option represents wave i of (iii) of [iii] of minor 1. The double zig zag I have labelled from the 1010.91 low would be wave ii of (iii), so implies a wave iii of (iii) decline to follow.

I've labelled a complete 5 wave decline from 1099.08 to today's low at 1056.88 to complete wave [1] of iii of (iii) down.

The 1099.08 high remains the invalidation point for the completion of wave ii on the double zig zag as labelled.

 

Option 2 - Wave [ii] topped at 1131.23

15 min chart:

For this Option, five waves down from 1131.23 represent wave (i) of [iii] of minor 1 down. The double zig zag up from 1010.91 would be wave (ii) of [iii], so, assuming its complete, we would be in wave (iii) of [iii] down.

This is the same labelling as on the chart of Option 1 for the rally from 1 July and subsequent decline (although the wave degress are different), so the invalidation point is  the same.

Option 3 - Ending diagonal complete at 1010.91

15 min chart:

For this Option, 5 waves down from 1131.23 to 1010.91 could be  wave [v] of a leading diagonal down from 1219.80 and, therefore, minor wave 1.  

It places us now in minor wave 2 up.  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.

I'm showing us having completed wave (iii) (at 1099.46) of what I'm assuming at the moment will be a 5 wave move for wave [a] of minor 2.  This would mean the pullback to today's low was wave (iv) of [a].

Today's action looks like it completed wave (iv), putting us now in wave (v) up to complete minute [a] of minor 2 - taking out today's low will invalidate that.

The alternate labelling assumes that the 5 waves down from 1131.23 is only wave (a) of [v] and that the retracement back up was wave (b). Assuming its complete, we'd now be in wave (c) down and the count shown on the charts of the other Options would likely be in effect.

Remember, if there is further downside  to come, we must stay above 999.83 for the leading diagonal count to remain valid. 

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

15 min chart:

For this Option, 5 waves down from 1131.23 would be wave (i) of [c] of minor Y and the double zig zag up from 1010.91 would be wave (ii) of [c].

However, as mentioned previously, counting a complete 5 waves down to 1010.91 does bring in the possibility that wave [c] of Y is done so we have also completed intermediate wave (X) - see the 60 min counts page. That would put us now in a minor wave A rally and eventually take us to new highs. If wave (X) did end at 1010.91, then the impulse wave I have labelled on the chart of Option 3 would apply here.

For the moment, I've assumed we are starting wave (iii) of [c] down  from  the 1099.08 high. The 5 waves down to today's low would be wave i of (iii)  of [c] and today's rally would be wave ii. 

The invalidation point is the same as for Options 1 and 2.

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

15 min chart:

On this Option, 5 waves down to 1010.91 would be wave [a] of minor Y down and the retracement would be wave [b]. If its over, we would now be headed down again in wave [c] to complete minor Y.

I've labelled a single zig zag on this chart for wave [b], but its end point is the same as for Options 1, 2 and 4, namely, the high at 1099.08, so that would be the beginning of wave [c]. 

I'm counting the 5 waves down from that high to today's low as wave (i)  and today's rally as wave (ii) of [c]. The same invalidation point stated for  options 1, 2 and 4  apply here.

Here's an update of the chart I posted earlier showing the 5 waves down to today's low and the subsequent rally:

SPX 1 min:

The degree labels used relate to Option 2. If it is a 2nd wave retracement, it should be done about now or very nearly done. The second zig zag is about 1.618 x the first zig zag at today's high and the retracement is 61.8% of the first wave.

Obviously, we can't ignore the fact that it can also be counted as an impulse wave up from today's low, which could mean that the continuing double zig zag previously identified could be playing out and that these 2nd waves up from 1010.91 are retracing higher.

SPX 1 min - double zig zag still in progress:

The other possibility, if 1098.66 is taken out, would be that the count on the chart of Option 3 is playing out, so we would have to expect a substantial rally which would very likely take out the high at 1131.23.

So, the immediately bearish count, the moderatley bullish count and the very bullish count all remain on the table. The immediately bearish counts will be invalidated above 1099.08, in which case, focus will then switch to the more bullish options.

19:33 BST - SPX Update

This count wins as far as the bearish case goes:

SPX 1 min - 5 waves down to 1056.88:

If the labelling is correct, it can be counted as complete. However, if its an [A]-[B]-[C], it may need one more push up to compete 5 waves from where I  have wave [X] (which would be a [B] wave low).

Beware that the bullish count shown on the chart of Option 3 remains very much alive, as does the continuing double zig zag which is less bullish, but will still involve more upside than we have seen today - see last night's update for these.

16:58 BST - SPX Update

If we completed 5 waves down at today's low and are retracing up in a second wave, here's a possible count (today's low is the invalidation point):

SPX 1 min chart - 5 waves down to 1056.88:

If we're in the more immediately bearish nested ones and twos down, here's a possible count with wave [3] continuing to subdivide:

SPX 1 min - wave [3] in progress:

Taking out the wave (2) high would invalidate this count.

15:29 BST - SPX Update

If we're in a wave ii retracement up as anticipated by the alternate count on this chart (updated from my earlier post), we probably don't want to see 1059.12 taken out at this stage. If it is, it may be a warning that the more bearish count shown is playing out:

SPX 1 min chart:

14:43 BST - SPX Update

If we're in a 3rd of a 3rd at various degrees, as anticipated in two of the counts I posted earlier, we should drop through the price void on this chart without much difficulty. If we're completing wave [5], as shown as an alternative on the second chart in the earlier post, we may make a brief foray into it then start back up in a 2nd wave retracement (the third count in the earlier post has been invalidated):

SPX 60 min chart:

11:24 BST - DAX Update

The Dax has been the more resilient of the major world indices over recent weeks, but it may be on the verge of playing catch up, if the bearish counts in the other markets are playing out.

Here's the daily chart showing a count that has us in wave [iii] of minor 1 down from the high at 6341.52. I've labelled the start of wave [iii] as waves i and ii of wave (i) of [iii], which is very bearish. It may be that the waves labelled i and ii should be (i) and (ii) - this will depend on how far the next decline, if it happens, takes us:

DAX daily chart:

Here's a close up of the decline from the high marked [ii] at 6330.81, updated from my post on 29 June:

Dax 15 min chart:

It does look like its on the way to forming a nice 5 waves down from the wave ii high for wave [1] of iii, but it does have a bit more to do to complete those 5 waves.

So, the bearish count for the Dax could be gaining momentum as the Dax leads the way down, at least for today. However, we can't dismiss the bullish posibilities here, so its still worth keeping an eye on this one in case its starts to lead the way back up rather than down.

10:19 BST - SPX Update - Variations of the Bearish counts from 13 July high

Here's a quick look at some ways to count the decline we have seen since the 1099.46 high on 13 July. These apply to the bearish Options, 1, 2, 4 and 5 (meaning, the counts which should be bearish in at least the short term - see the 60 min counts page). I've used the chart of Option 2 as the basis for the degrees of the labelling. All assume a truncated high on 14 July at 1098.66.

The count I've been posting has us in a [1]-[2]-(1)-(2)-1-2 down, which anticipates a 3rd of a 3rd at various degrees will occur very shortly and probably without much more upside beforehand, as mentioned in last night's update:

SPX 1 min - [1]-[2]-(1)-(2)-1-2:

This count is invalidated as labelled if 1079.64 is taken out by wave 2.

The next chart contains two possible counts. 

The first is a [1]-[2]-(1)-(2) - still bearish but there could be more upside in wave (2) before we drop. For example, if wave (2) is actually an A-B-C correction, the move from yesterday's low, where I currently have wave X (which would be wave B) would have to form 5 waves. So another up leg from 1068.4, which I would consider the 4th wave, would be needed. The 4th wave couldn't end below 1067.41, which I would consider the 1st wave (see the third chart posted below).

The second count on this chart shows a [1]-[2]-[3]-[4] from the 1099.08 high. If this is correct, wave [4] has retraced nearly 38.2% of wave [3], so could be about done. So, we would expect a decline in wave [5]. This version of the count would be invalidated if wave [4] ends above 1087.68.

SPX 1 min - [1]-[2]-(1)-(2) or [1]-[2]-[3]-[4]:

The last chart shows a complete 5 waves down from 1099.08 as at Friday's low:

SPX 1 min - 5 waves down to 16 July:

This count would assume more upside in wave ii before we start wave iii down. There is an area of price congestion between the 38.2% and 50% retracement levels, but obviously, wave ii would have the potential to go higher. If we take out the wave (1) of [C] high at 1067.41 before making a new high in wave [C] of ii, the count, as labelled, will be invalidated.

 

21:47 BST - SPX Update

On the counts that imply the rally from the 1 July low is a corrective one (Options 1, 2, 4 and 5) I've labelled completed double/single zig zags ending with a truncation at 1099.08.

On the count that places us in a 5 wave move off the 1 July low (Option 3), which would be part of a larger correction up,  I've labelled the high at 1099.46 as wave (iii) of that advance and the subsequent decline as wave (iv).

The Options 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. 

Today's action did nothing to answer  the question whether the rally from 1 July has completed a corrective move or whether its only all (or maybe, part) of a larger correction up.

Here's how things stand after today:

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

15 min chart:

Five waves down from 1131.23 on this Option represents wave i of (iii) of [iii] of minor 1. The double zig zag I have labelled from the 1010.91 low would be wave ii of (iii), so implies a wave iii of (iii) decline to follow.

The 1099.08 high is the invalidation point for the completion of wave ii on the double zig zag as labelled.

I've labelled a (1)-(2)-1-2-i-ii to account for the decline since. The invalidation points are 1079.64, which would eliminate the i-ii, and then 1098.66, which would call into quesion whether we did top at 1099.08.

Option 2 - Wave [ii] topped at 1131.23

15 min chart:

For this Option, five waves down from 1131.23 represent wave (i) of [iii] of minor 1 down. The double zig zag up from 1010.91 would be wave (ii) of [iii], so, assuming its complete, we would be in wave (iii) of [iii] down.

This is the same labelling as on the chart of Option 1 for the rally from 1 July and subsequent decline (although the wave degress are different), so the invalidation points are the same.

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

15 min chart:

For this Option, 5 waves down from 1131.23 to 1010.91 could be  wave [v] of a leading diagonal down from 1219.80 and, therefore, minor wave 1.  

It places us now in minor wave 2 up.  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.

I'm showing us having completed wave (iii) (at 1099.46) of what I'm assuming at the moment will be a 5 wave move for wave [a] of minor 2.  This would mean the current pullback should be wave (iv) of [a]. This count would be invalidated if that assumed wave (iv) were to fall below 1028.74, the wave (i) high.

Today's action may have completed wave (iv) - taking out today's low will invalidate that, but it may just mean wave (iv) has a bit more to go.

The alternate labelling assumes that the 5 waves down from 1131.23 is only wave (a) of [v] and that the retracement back up was wave (b). Assuming its complete, we'd now be in wave (c) down and the count shown on the charts of the other Options would likely be in effect.

Remember, if there is further downside  to come, we must stay above 999.83 for the leading diagonal count to remain valid. 

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

15 min chart:

For this Option, 5 waves down from 1131.23 would be wave (i) of [c] of minor Y and the double zig zag up from 1010.91 would be wave (ii) of [c].

However, as mentioned previously, counting a complete 5 waves down to 1010.91 does bring in the possibility that wave [c] of Y is done so we have also completed intermediate wave (X) - see the 60 min counts page. That would put us now in a minor wave A rally and eventually take us to new highs. If wave (X) did end at 1010.91, then the impulse wave I have labelled on the chart of Option 3 would apply here.

For the moment, I've assumed we are starting wave (iii) of [c] down with a [1]-[2]-(1)-(2)-1-2 from  the 1099.08 high. The invalidation points are the same as for Options 1 and 2.

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

15 min chart:

On this Option, 5 waves down to 1010.91 would be wave [a] of minor Y down and the retracement would be wave [b]. If its over, we would now be headed down again in wave [c] to complete minor Y.

I've labelled a single zig zag on this chart, but its end point is the same as for Options 1, 2 and 4, namely, the high at 1099.08, so that would be the beginning of wave [c]. The same invalidation points stated for  options 1, 2 and 4  apply here.

Here's an update of the chart I posted earlier showing a possible bearish count for today's move. If we continue to retrace up, it may mean that the larger diagonal I showed as an alternate on Friday night may be playing out but for the time being, I'll go with this:

SPX 1 min:

The degree labels used relate to Option 2.  The count shows wave [3] sub dividing into a (1)-(2)-1-2 where wave 1 was a leading diagonal. Wave 2 retraced 70.7% of wave 1, which is deep enough to provide some confirmation that a leading diagonal may be the correct count for wave 1. The count calls for a 3rd of a 3rd wave at several degrees  fairly soon. If that does not happen, its going to call the bearish count into question.

However, if we are in the larger leading diagonal count a deeper retracement up wouldn't be unusual, so while the count shown above would be invalidated above 1079.64, a deeper retracement of a larger leading diagonal would be a continuing possibility for the bearish case. However, we'd still need to watch the 1098.66 high since if that is taken out, the chances are that we are still in a double zig zag correction, as shown on this chart that I've posted previously:

SPX 1 min - double zig zag still in progress:

The other possibility, if 1098.66 is taken out, would be that the count on the chart of Option 3 is playing out, so we would have to expect a substantial rally which would very likely take out the high at 1131.23.

So, the levels to watch haven't really changed from Friday. We'll just have to continue to wait for the market to move decisively one way or another so that at least some possibilities can be excluded.

16:17 BST - SPX Update

The more bullish counts aren't yet off the table:


SPX 1 min - continuing double zig zag:

SPX 1 min - impulse wave up from 1 July:

 

15:54 BST - SPX Update

Getting closer to that void:

SPX 60 min chart:

15:41 BST - SPX Update

Here's what I'm seeing as a possible count on the bearish scenarios at the moment - a wave (1) down from 1098.66, a wave (2) retrace and then a leading diagonal for wave 1 of (3):

SPX 1 min chart:

We retraced nearly 61.8% of wave 1 which perhaps is deep enough for a retrace of a diagonal if we are in the bearish counts. I prefer this to the larger leading diagonal that I posted on Friday night, but of course, the retracement up may not be complete so we'll just have to see what develops now - it may retrace up enough that the larger leading diagonal looks more likely. 

I'm watching today's highs and the wave (1) low for signals that a higher retacement up may be playing out.

11:04 BST Dollar Update - Some trading examples

On 9 July, I posted a count showing a possible end to the decline in the dollar with what looked like an ending diagonal. It ultimately turned out not to be the case, but as mentioned in my post on 15 July, there was still a profitable long play based on the thought that the low identified on 9 July at 83.622 was possibly the end of the decline.

Indeed, once the long play was over, there were several opportunities to the downside as well.

Here are two 60 min charts covering the period from the 83.622 low to Friday's close which show some very simple trades primarily using the 13 and 20 simple moving averages for signals:

Dollar 60 min - trades Part 1:

Dollar 60 min - trades Part 2:

Of course, it won't always work out like this, but for the period covered by the two charts, using this very simple  system, there was only one small loss  - on the trade identified at point 5 which was stopped out at point 6.

I think the important point to make here is that elliott wave counts evolve as price action develops. Its important not to get stuck in one line of thought and to be open to all possibiities. Once a possible end to a count is identified, its important to be aware of what price needs to do to increase its odds of it being the correct count and what price shouldn't be doing if the count is correct. Other TA methods can then be deployed to identify entry and exit points as well as giving indications of when the count in question may be in jeopardy so that trading ideas can be adjusted accordingly.