19:50 BST - SPX Update: 1 min - Possible bearish alternate count

Here's another possible bearish count to consider - if we count 5 waves up from the 1069.49 low, that could be wave [C] of an expanded flat wave ii correction. This means placing the wave i low at 1076.69. Here it is on the chart of Option 1 (so the degrees of the labels used are one less than the degrees I've mentioned and which appear in the previous 1 min charts):

SPX 1 min - expanded flat for 2nd wave:

So, further hope for the bear case, but obviously, until we see an impulsive decline and take out the low at 1069.49, the risk of further upside, whether in the double zig zag referred to in my last post or from the bullish counts, can't be ruled out.

19:37 BST - SPX Update: 1 min close up - revised bearish count

The bullish counts are looking very good at the moment - see earlier post here - but for the bear case, there's still hope. 

Although we haven't so far taken out yesterday's high, this can only be said of SPX and the Dow; the Nasdaq Comp, NDX, RUT and TRAN have taken out those highs. It may be the case that SPX and the Dow are leading the way down in a (1)-(2), but since they got so close to taking out that high, if we are at a corrective top, it may be better to treat their failure to take it out as a bearish divergence against this other indices that have done so. 

So, with a re-adjustment of the labels, here's a single zig zag count for SPX which shows the rally today as wave [C] of the zig zag, with a possible truncation, in that it is failing to get above the high of wave [A]:

SPX 1 min close up:

I've shown a top at today's current high, but it may be premature and we may still be in wave 4 of (5), with a new high on SPX (and/or in the Dow) to come.

I've left on the possible double zig zag labels because if we're in a double zig zag, I'd have to count today's rally as wave (A) of [Y], in which case, we'd have a further high to come once we've had a (B) wave pullback.

 

17:27 BST - SPX Update: 15 min pitchforks

Here's the 15 min chart updated from last night:

SPX 15 min pitchforks:

You can see that we did drop out of the green fork. We're now testing the upper red line of the red fork I drew on last night. If we're in the bearish count, we should see this hold back price. As pointed out in last night's update, price may get further above it as it did on the rally to 1127.16. If that happens, the bearish case will require a quick drop back within it (you can see how the market fell following the false break above the blue fork).

Note, its possible to draw a new upward fork using the low on 16 August, yesterday's high and today's low - I haven't drawn it in because it would make the chart really cluttered (well, more cluttered), but that's another reason why we need to see the red fork hold for the bear case.

16:45 BST - SPX Update; 1 min close up

If we're in the bearish count, we're either still trying to complete wave (1) down from the 1100.14 high, or we have completed it and we're currently in wave (2). Given the width of the retracement up from today's low compared to what I've labelled wave 2 of (1), I think I prefer the latter even though the 5th wave would be very elongated (it was the count I showed last night and this morning, but I've labelled the former on the following chart):

SPX 1 min close up:

If its wave 4 of (1), we need to stay below the wave 1 low at 1097.51. If its wave (2), we can't take out the 1100.14 high (if its wave (2), there may be further upside to come since its only about a 38.2% retrace (50% would be at about 1093).

15:19 BST - SPX Update; 1 min chart bullish count

This is one to watch out for on the bullish count. Although we haven't invalidated the [1]-[2]-[3]-[4] count I showed last might (see here), with a supposed 4th wave retracing  about 61.8%, thoughts have to turn to something more bullish: a [1]-[2]-(1)-(2):

SPX 1 min bullish alternate under Option 4:

Still, watch both the invalidation points since both counts remain in play - the wave [4] count is invalidated below 1082.62. The more bullish count in the chart is invalidated below 1075.16.

14:40 BST - SPX Update - 1 min close up

The possibility that we were in wave (4) of [C] of ii, with wave (5) still to come has been eliminated with the drop below 1089.05. However, there is still the double zig zag possibility I mentioned earlier and the bullish counts - see last night's end of day update and my earlier post of the 60 min chart for levels to watch to invalidate these:

SPX 1 min close up:

13:54 BST - Dollar Update; 20 min chart - possible head and shoulders

I've re-labelled the move in the dollar since the high at 83.016 to remove the triangle that appeared to have formed yesterday. With subsequent price action, this may be a better alternative (you can see the bigger picture on the dollar page):

Dollar 20 min:

If we don't see a turn up soon, we'll be in danger of taking out the 81.534 level I've been mentioning as the invalidation point for the main count as labelled. That would mean that the most likely bearish alternative would put us in a wave (ii) correction.

This might fit with the head and shoulders pattern I've marked on the chart which has a target to about 81.000 if it follows through. This would be about a 70.7% retracement if we are in wave (ii) not iv.

Of course, a failed head and shoulders would be bullish for the dollar. However, until it starts pushing up impulsively again, we have to assume that more downside may be on the cards.

12:16 BST - SPX Update: 60 min pitchforks and technical indicators

You'll remember from the 15 min chart I posted yesterday (see the last post here - it has links to the earlier posts) that we saw some nice bearish divergences in the standard technical analysis indicators against price as we moved into yesterday's highs. Coupled with the potential resistance from the upper lines of the blue and green forks and a possible complete elliott wave count, the signs were that we would get a turn down in price.

The position with the indicators is not so clear on the 60 min chart:

SPX 60 min pitchforks:

The RSI and stochastic are turning down, but there hasn't been any obvious bearish divergence against price at the peaks that these indicators  made yesterday. The same applies to the MACD histogram. That formed a substantially higher peak yesterday than the peak it made in what I've labelled as wave [A] of ii. Within that higher peak, the bars did start to print lower highs, but that was consistent with the price action, not diverging from it.

The turn down in these indicators on this time frame may be sufficient in the context of a 2nd wave within a 3rd , to mark the end of the 2nd wave correction. However, I think it sensible to be aware of the potential risk that the end of the correction won't come until these indicators print divergences against price, which means that we may see a higher high in price than yesterday before this 2nd wave is over.

This would fit with the alternative count I have, suggesting that the drop off from the high yesterday may only be wave (4) of [C] of ii (you can see this on the 1 min close ups I posted during the day and also in the charts posted in the end of day update). There is a further alternative that could lead to new highs - we did complete a single zig zag yesterday, but the drop from the high is all or part of an [X] wave before a second zig zag higher.

What we're seeing in the indicators on this time frame (or rather, what we're not seeing) could also fit with the bullish counts (see the last two charts in yesterday's end of day update), where we are in the 4th wave of an impulse up from 1069.49 and which is part of a larger impulse up from the low of 1010.91.

As I said in the end of day update, for the bearish count, to preclude the alternative of a further high to come, based on the way I've labelled the [C] wave of ii, we need to drop below 1089.05. However, to preclude yesterday's late sell off from being a 4th wave on the bullish counts, with a further high still to come, we need to drop below 1082.62. The next level down is 1075.16 - taking that out would certainly enhance the bearish case and would make the second zig zag possibility less likely (though we'd need to take out 1069.49 to be sure it wasn't playing out).

This is just something to be aware of given that the 60 min indicators don't seem to have shown the usual divergences we would expect when a top is made.

22:07 BST - SPX Update: 15 min pitchforks

Here's an update of the 15 min chart I posted earlier today (you can see the the earlier posts here and here):

SPX 15 min pitchforks:

 

The resistance at the intersection of the upper lines of the green and blue forks held well and with the 200ma, pushed prices down, almost back to the lower line of the green fork. That's not bullish action and may be confirming that we have seen the end of the rally from the 1069.49 low.

However, we really need to see price fall out of the green fork, perhaps re-test the lower line from below and for it to fall away from there before we can get too confident of this. Obviously, we need a confirming wave count too!

I've drawn in a new downward red fork, which may provide some guidance as to a possible path for price to take if we are now in a 3rd wave down, as the bearish wave count suggests. It may be that we see an attempt to break up above this fork first, as we saw with the blue fork when price rallied up to 1127.16.  However, this doesn't have to happen and if things get really bearish, we may just head straight for the median line of the red fork. We'll have to wait and see.

For the moment, the first aim is to break out of the green fork. If we had 5 waves down from today's high for the start of a new impulse wave lower, as provisionally labelled in tonight's end of day update, this shouldn't be too difficult to achieve very quickly.

If we're still in wave [c] of ii, then we may not break the green fork's lower line (or if we do it may only be briefly) and we may just head back up towards its upper line, which will likely result in the upper line of the blue and red forks being broken above also.

So, these forks may be worth monitoring along with the wave count as price action develops.

21:17 BST - SPX End of Day Update

The Options referred to below are different ways to count the move down from 1219.80 to 1010.91 and you can see them on the 60 min counts page.

To see the various ways to count the rally from the 1010.91 low on 1 July, see the 10 min charts in last night's end of day update.

In tonight's update I'm concentrating on the move from the 1129.24 high and the rally we have seen since the low at 1069.49.

Here is the 1 min chart of the decline from 1129.24. This is the bearish count for all of the Options shown on the 10 min charts in last night's update, although the labels, including the degrees of those labels, relate to Option 2:

SPX 1 min - decline from 1129.24:

We appear to have seen a nice 5 waves down from the 1129.24 high to the low at 1069.49. This would be wave i down on the bearish count.  The rally from the low at 1069.49  would be wave ii. It has to stay below the high of 1129.24 in order for this bearish count to remain valid.

The move up from 1069.49 could be counted as a double zig zag, but I've labelled a single zig zag which consists of 5 waves up for wave [A], a 3 wave pullback in wave [B] and 5 waves up for wave [C].

The question is whether or not we've completed wave [C]. You can see the alternate labels I've put on the chart which suggest we may have another leg up in wave (5) of [C] still to come. We may have had 5 waves down from today's high, as you can see from the second chart above. However, this could be a c wave in an expanded flat correction or an a wave of a correction. or it could count as a zig zag. For the moment, I've labelled it as wave (1) down.

Here's a closer look:

SPX 1 min close up:

If we take out the high at 1089.05 which is the alternate wave (1) of [C] high, without a new high first, then we can eliminate the alternate count. Taking out that level would also increase the likelihood that this single zig zag has topped. Today's high would certainly be a good place for a wave ii top. Its at the 50% retracement level which is where I said in last night's update I would ideally like to see wave ii end.

However, until we start dropping in a manner consistent with having completed a 2nd wave corrective retracement and we see important levels to the downside taken out, the risk of more upside remains. 

Any further upside could be within the context of the overall bearish counts shown on the 10 min charts in last night's update and in the 1 min charts above, provided we stay below 1129.24. However, as long as no significant level to the downside is breached, the risk of further upside in the bullish counts remains and these could take us substantially higher.

The two bullish counts I've been posting are under the bullish alternate for Option 4. You can see the bigger picture of the bullish alternate  on the second chart under the Zig Zag from March 2009 page, where it is shown as the alternate count and a further explanation and context can be found on the 60 min counts page.

Here are two possible ways to count this bullish alternate:

SPX 1 min - bullish alternate under Option 4, impulse up from 1010.91:

This count won't be eliminated until we drop below 1056.88. (see the chart of this count on the 60 min counts page which shows that level). 

However, if the labels shown are correct, and we are in wave [4], we would have to stay above 1082.62 otherwise this labelling would be invalid. 

If we take out that level, it might still be a [1]-[2]-(1)-(2) up from 1069.49. To avoid that, we'd need to take out the low at 1075.16. If we take out that level it would be unlikely that we were seeing an impulse wave up from 1069.49. 

Still, until we take out 1056.88, this count remains a possibility, since until then, we could still be in wave (ii).

SPX 60 min - bullish alternate under Option 4, leading diagonal from 1010.91:

This count will only be invalidated if we drop below 1010.91. The levels to watch referred to in relation to the first alternate for the bullish count apply here too.

However, if we take them out, the possibility remains that we are still in wave B. So, really, we need to take out the low at 1010.91 in order to invalidate this count.

So, if we're in a wave ii retracement, if there is any further upside to come, the high of 1129.24 cannot be taken out. If it is, the bearish counts, as labelled, will be invalidated.

It wouldn't mean that all bearish counts would be off the table, it would just mean a delay in the resumption of the bear case - see the explanation of what a high above 1129.24 (and 1131.23) could be on each Option on the 60 min counts page.

For a step by step elimination of the bullish possibilities, the  levels to watch to the downside which I've referred to above are 1089.05, 1082.62 and 1075.16. After that, we have 1069.49, 1056.88 and finally 1010.91.

18:59 BST - SPX Update; 15 min ptichfork resistance and TA divergences

On this 15 min chart, we've reached the fork resistance I mentioned may be a possible target earlier and we have divergences on the indicators to accompany it, along with a potentially complete elliott wave count:

SPX 15 min pitchforks:

Whether or not this plays out, however, remains to be seen - we have to start taking out important levels to the downside. The 1089.05 level mentioned in my last post is the first one we need to go for the bear case.

18:52 BST - SPX Update; 1 min close up with alt count

Following on from my last post, we'll have to see how we pull back now. If we don't drop as if we've started a 3rd wave down, here's another possibility we'll have to bear in mind for more upside on the bearish count - see the alternative labels on this chart:

SPX 1 min close up:

If we take out the high at 1089.05 in the next pullback, which would be wave (4) on this alternative count, this alternative will be invalidated.

18:42 BST - SPX Update: 1 min chart close up

The further new high possibility in the last post is playing out. It could now be about done, based on this labelling:

SPX 1 min close up:

However, as before, if we've completed a corrective rally, we need to start dropping as we would expect once a correction is over. If we don't, the risk of more upside remains.

17:34 BST - SPX Update: 1 min chart close up

Here's the close up of the bearish count, but I've noted on it the possibility for another high to come to complete wave (5) of [C] - this arises if wave (4) wasn't a triangle:

SPX 1 min close up:

Unless we start dropping like we've completed a corrective move up from yesterday's low, this possibility remains.

17:17 BST - SPX Update - 1 min bear count and 1 min bull count

The triangle break out provided a bit more than expected which is always nice. Now it looks like we could have a complete 5 waves up from the [B] wave low, although there could be a few more squiggles to come - difficult to tell when the market moves in a striaight line:

SPX 1 min from1129.24 high:

We've retraced nearly 50% and hit the 1096 level where wave [C] is 1.618 x wave [A] as mentioned in yesterday's end of day update. So, it would be a nice place for wave ii to end. The alternate count, by the way, may be less likely now - this retracement is fine for wave ii.

Obviously, what looks like a zig zag could also be a [1]-[2]-[3]. Here's one of the bullish counts from last night's update to show the bullish possibility here:

SPX 1 min - bullish alternate under Option 4:

To negate this we need to take out the wave [1] high at 1082.62 in an assumed wave [4]. Then we need to drop below the low at 1075.16, to rule out a [1]-[2]-(1)-(2). Finally, we need to take out the low at 1069.49.

Until we start to drop and take out these levels, the risk of more upside remains, in my view.

15:41 BST - SPX Update: 1 min chart close up

If this is a triangle, we should see that 5th wave:

SPX 1 min close up:

The height of the triangle is 3.68 points so we could add that to the break out level for a possible target for wave (5) - I think its about 1092 if we break up soon.

If we've had the C wave low of the triangle (the second touch on the lower blue line) its at 1085.91 - taking that out in a wave E would invalidate the triangle. If we're still in wave C, we can't take out the wave A low at 1085.37.

15:22 BST - SPX Update; 15 min pitchforks

In pitchfork terms, the stall that we're currently seeing follows a hit near the upper  line of the new green fork. Price quickly fell back down below the median line of the old blue downward fork and is struggling to get back above it:

SPX 15 min pitchforks:

In terms of the elliott wave count, you'll see from my earlier post that a further high would make an ideal looking 5 waves up from the [B] wave low. If that is to happen, we may see a further move above the median line of the blue fork and towards the upper line of the green fork, but, if we're seeing a 5th wave up, we may see a failure to get to the upper line of the green fork, and a collapse back down as wave [C] completes (or wave (1) of [C]).

If we are only seeing wave (1) of [C], then we may expect further upside to get back to the upper line of the green fork and the upper line of the blue fork after perhaps a false break below the median line of the green fork. We might even see a new, steeper upward fork form to accommodate an acceleration move for (3) of [C].

If we simply break down below the green fork altogther from here - that's going to be pretty bearish.

14:55 BST - SPX Update; 1 min chart close up

This does look like it needs another high to complete a clear looking 5 waves up from the low I have as [B]:

SPX 1 min close up:

If we get it, the question will be whether its all of [C] or just wave (1) of [C]. We'd need to take out the [B] wave low to avoid the possibility of an extending [C] wave.

If we don't get a new high and drop below the high I have as wave (1), it will look like 3 waves up, but it may be one of those waves with a small 1 and 3 then an extended 5 - see the wave from [4] to [5] on this chart.  Again, even if this happens, the high today may only be part of [C] until we take out the [B] low.

13:59 BST - ES Update: 60 min chart

ES on the 60 min chart has been moving up since yesterday's afternoon low, within a new upward fork. Its just reached the upper line of the red downward fork that delineated the drop from the recent highs, so this may provide at least temporary resistance:

 

ES 60 min:

To confirm more upside, we need to break above the red fork's upper line and get towards the upper line of the green fork. We're above the moving averages and the cloud, so things are aligned for more upside. 

The only worrying thing is that as of now, the Dow futures have failed to make a new overnight high along with ES. That's often not a good sign. It may work itself out, but if not, it may be a warning of a possible failed gap up to come when the cash markets open.

11:04 BST - Dollar Update: 20 min chart

I've amended the count for the dollar that I've been showing on the 20 min chart (see yesterday's update), to put the high of wave iii at the high for the rally from the 80.085 low, at 83.016.  

The reason for this is that since we took out the low I had labelled as wave iv, it was necessary to switch to the alternate count I have been following and which I explained in the last update. However, for that, we needed a 5 wave move from the high for [C] of iv. Instead, we're getting what looks like a zig zag. That would mean I'd have to switch to a [W]-[X]-[Y] labelling for wave iv which would have been fine except that both [W] and [Y] would be zig zags, but [X] took out the high of [W], so the overall correction couldn't be a double zig zag, it would have to be a double three. However, for that, wave [W] needed to be a flat since wave [Y] looks like a zig zag. I couldn't label wave [W] in that way since within it, wave (B) didn't retrace at least 90% of wave (A).

I actually prefer this count now since at the 83.016 high, wave iii is about 1.618 x wave i. Also, within wave iii, wave [3] is about 1.236 x wave [1] and wave [5] is about equal to wave [1]. So, some nice fibonacci relationships on this labelling:

Dollar 20 min:

Apart from that re-labelling, there is no significant change to the important levels - this count putting us in a wave iv correction will still be invalidated if we take out the wave i high at 81.534.

You can see on the chart that we're at the 38.2% retracement where there is also support from the wave [4] of iii low. If that support fails, we could well slip to the 50% retracement level and then we would be in danger of getting to the wave i high and invalidating this count.

If it is invalidated, the prior alternative still stands, that we have had a wave (i) high (it would now be at the 83.016 high) and the retracement from there would be wave (ii), so could go alot deeper towards the 80.085 low. Obviously, it could not take out that level since doing so would invalidate that count, in which case, some of the more bearish alternatives noted on the dollar page would have to be considered as possibly in play.

So, we're looking for an end to a wave iv correction around the current levels, to be followed by a wave v move up fairly soon. Watch the 81.534 level for the invalidation of this count and if that happens, the 80.085 low becomes the level to watch.

21:22 BST - SPX End of Day Update

The Options referred to below are different ways to count the move down from 1219.80 to 1010.91 and you can see them on the 60 min counts page, which will put the charts below into context.

The 10 min charts below show various ways to count the rally from the 1010.91 low on 1 July in the context of the larger picture shown on those 60 min charts.

On the charts of Options 1 and 2, I'm showing a single zig zag. On the chart of Option 3, there is a triple zig zag,  on the chart of Option 4 there's a double zig zag and on the chart of Option 5, there is a single zig zag with an ending diagonal for wave (c). On these 10 min charts, all of these moves are shown as having topped at 1129.24. See the 60 min counts page for what this means, if correct, in the context of each Option.

The count from the high of 1129.24 is the same for all of these Options, assuming the rally off the July low was corrective as these 10 min charts assume.

Here are the 10 min charts of each Option:

Options 1 and 2 - from 1010.91, a double zig zag:

The chart relates to the count for Option 2, but the count for Option 1 is pretty much the same into the high, just one degree lower, namely, a single zig zag which is complete at 1129.24. 

Option 3 - from 1010.91, a triple zig zag:

On this Option, I've shown the rally from the July low as a triple zig zag, also complete at the 1129.24 high.

Option 4 - from 1010.91, a double zig zag:

A double zig zag count also complete at the 1129.24 high, is shown on the chart of this Option.

Option 5 - from 1010.91, a single zig zag with an ending diagonal for wave (c):

On the chart of this Option I've shown a single zig zag count, with an ending diagonal wave (c).

On all of the above bearish (Options 4 and 5 are only  near term bearish) counts, if we  can count a corrective wave high at 1129.24, it doesn't really matter whether its a single, double or triple zig zag. The important thing now is what has happened since the high at 1129.24.

Here is the 1 min chart of the decline from 1129.24. This count applies to all of the Options shown above, although the labels, including the degrees of those labels, relate to Option 2:

SPX 1 min - decline from 1129.24:

You can see from the 1 min chart that there does appear to be a clean 5 waves down from the 1129.24 high to the low at 1069.49. This would be wave i down and we would now be correcting in wave ii up.  If its right that the rally from the low at 1069.49 to the high at 1082.62 was 5 waves, then it means that wave ii is formimg a zig zag.  In turn, this means that wave [B] of ii can't move below the low of wave i.  If it does, then it may be that a double three would have to be counted from the low, instead of a straightforward zig zag.

Or, it may be that one of the alternatives mentioned on the chart is playing out (the second one below is actually the running flat variation of the expanded flat alternative labelled on the chart).

The first of those is that the low at 1069.49 was only wave (1) of [5], with the subsequent rally being wave (2) of [5]. This is quite possible - I can count the rally as a double or single zig zag.  A single zig zag would put wave A of (2) at 1081.40, followed by a wave B pullback, then the rally to the high at 1082.62 would be wave C of (2). This possibility remains intact as long as the high at 1082.62 holds, assuming the decline from there is all or part of wave 1 of (3) of [5].

The second alternative count, if we had 5 waves up from 1069.49 and take out that low before we make a new high,  is that wave [4] of i topped today as a running flat type correction. The 5 waves up from the low would be wave (C) of that running flat, with the decline from there being part of wave [5] of i. This would be a variation on this alternative of wave [4] still in progress which I have on the chart, which assumes that we're seeing a zig zag up from 1069.49, for wave (Y) of [4] for an expanded flat type correction.

Here's a close up of the count showing the end of the triangle I have labelled for wave [4]. Its the chart I've been posting during today:

SPX 1 min close up:

If we don't take out the 1069.49 low and go on to make new highs above 1082.62, then the main count putting us in wave ii up or the alternative which has us still in wave [4] of i would be the most likely counts. The alternate that has us in wave (2) of [5] would become less likely if we take out 1082.62 and would be ruled out if we take out 1083.28. 

Despite today's initial decline, the two bullish counts I've been posting under the bullish alternate for Option 4 remain intact. You can see the bigger picture of the bullish alternate  on the second chart under the Zig Zag from March 2009 page, where it is shown as the alternate count.

I have two possible ways to count this bullish alternate:

SPX 1 min - bullish alternate under Option 4, impulse up from 1010.91:

This count won't be eliminated until we drop below 1056.88.

SPX 60 min - bullish alternate under Option 4, leading diagonal from 1010.91:

This count will only be invalidated if we drop below 1010.91. However, please note my comments about that low on the 60 min counts page.

So, we can count 5 waves down from 1129.24 to 1069.49. If that's right, giving us our 1st wave down in a larger decline on the bearish counts, we are now in a 2nd wave retracement. This means that the high of 1129.24 cannot be taken out. If it is, these bearish counts, as labelled, will be invalidated.

It wouldn't mean that all bearish counts would be off the table, it would just mean a delay in the resumption of the bear case - see the explanation of what a high above 1129.24 (and 1131.23) could be on each Option on the 60 min counts page.

If we're in wave ii up and its forming a zig zag as the main labelling suggests, assuming wave [B] of ii bottomed at 1075.16, if [C] is to equal [A], we would see the next leg up get to about 1088. That would be less than a 38.2% retracement of the decline from 1129.24, perhaps a bit shallow for a 2nd wave. So, we might have to be prepared for a more substantial [C] wave, say a 1.618 extension of wave [A], which would take us up to about 1096, approximately a 50% retracement. If we only make a 38.2% retracement, it would probably make it more likely that the move up from 1069.49 was part of an on-going wave [4] of i.

Even though we're in a 2nd wave retracement on the main count and it could go all the way back up to the 1129.24 high and still be valid, ideally, it will retrace substantially less than that. The 50% retracement level mentioned above, if [C] were to equal [A] is about where I'd like it to end, especially if we are in 3rd waves down on most of the bearish counts. Anything too much deeper may have us on alert that the bearish count may be getting into trouble.

19:22 BST - SPX Update: 1 min chart close up

Whether this potential [A]-[B]-[C] is wave ii or still wave [4], it counts reasonably well still. If that is a triangle where I have (B) of the assumed wave [B], it makes it even less likely that the rally from the low today was wave (2) of [5] (but it can't be ruled out completely until we take out wave (E) of the triangle):

SPX 1 min close up:

Support seems to be around 1077, which coincides with the 38.2% retracment level and the wave (4) of [A] low. So, that area may be a logical stopping point for wave [B], but it can go lower.

17:49 BST - SPX Update: 1 min chart close up

The main count of a wave [5] and i low at 1069.49 looks OK at the moment, with what appears to be a decent 5 wave count up from the low (I've labelled it as complete, but it may not be):

SPX 1 min close up:

The alternatives still stand, especially the possiblilty that wave [4] is still in progress (this would line up with what may be happening in the dollar - see my earlier update where the alternate of an expanded flat wave iv may be the preferable count based on action subsequent to that update, even though we haven't yet violated the current wave iv low). 

The option that the rally from the low is wave (2) of [5] is close to being negated and, if we have had 5 waves up from today's low, would seem unlikely, though its possible to count the rally as a double zig zag. If we drop from here and take out today's low, this would certainly be a stronger possibility, though I'd still prefer the expanded/running flat for wave [4] option.

16:24 BST - SPX Update: 1 min chart close up

Here's a closer look at the options for the elliott wave counts just posted:

SPX 1 min close up:

16:18 BST - SPX Update: 1 min chart from 1129.24 high

Well, three possibilities at the moment for this action. Here's a 1 min chart from the 1129.24 high:

SPX 1 min from 1129.24 high:

1) wave [4] was a triangle ending at 1083.28 and we had 5 waves down to today's low to complete wave i. We're now in wave ii up. today's low at 1069.49 must hold for this to remain valid; or

2) as above, but the 5 waves from the end of the triangle to today's low was only wave (1) of [5]. For this to remain valid, we must stay below wave (E) of the triangle at 1083.28; or

3) wave [4] is a running or expanded flat, so we have yet to see wave [5];

12:33 BST - SPX Update 60, 15 and 5 min pitchforks and TA

Following on from my weekend post showing the weekly and daily charts of SPX with pitchforks and other, more conventional technical analysis, here are some intra day charts with a look at what those technical analysis tools might be suggesting:

SPX 60 min:

This was last posted on Friday when I interpreted the chart as suggesting that a further low was on the cards. I don't think that's changed. The RSI turned down at the end of the day, still having been unable to get to the 50 line, let alone above it. The MACD histogram  seems to have formed that peak that is lower than the prior one, which is bearish. The stochastic has turned down from the 50 line, again, bearish.

Price continues to oscillate around the lower line of the blue fork, with the 13ma forming a barrier of resistance at the moment.

As shown in my end of day update on Friday, the elliott wave count suggests another low is required to complete a nice looking 5 waves down from 1129.24. This 60 min chart is consistent with that and its probably set up to give  the postive divergence that we'd expect to see on a 5th wave - I mentioned on Friday that the MACD histogram troughs were consistent with a 1st and 3rd wave down in price; if we do get a 5th wave down, its not difficult to see that we might also get a higher trough in the histogram. If so, we might then start to look for higher low bars within that new trough to indicate that we may have seen the end of the 5th wave, as well as monitoring the elliott wav count (the one I showed in Friday's end of day update may or may not be correct).

Here's the 15 min chart:

The blue fork is the same as the blue fork on the 60 min chart above. You can see the pink fork did a pretty good job of delineating the 3rd wave down (if that's what it was), but was then broken to the upside on Friday. 

We formed a new upward green fork and got to the median line of that fork. This was initially bullish, but the fact that price fell straight back down to the lower line of the green fork, without much hesitation, suggested something was amiss. If it was bullish, price should have bounced at the lower line. Instead, it struggled for a while to cling on to the lower line, but when it hit the upper line of the new black fork that was created from the high that hit the median line of the green fork, it just collapsed away, towards the median line of the new downward black fork. That seems rather bearish.

If we're going to see a 5th wave down, we might expect it to get towards the lower line of the black fork - perhaps repeating the type of action we saw within the pink fork, but on a smaller scale.

The standard technical analysis tools on this chart also seem set up for divergence against a potential new price low, expecially the MACD and its histogram.

Here's the 5 min chart:

Except for the red fork, all of these forks are the same as the forks shown on the 15 min chart.

Its just a closer look at the failure of the break above the pink fork that seemed to be guiding price lower on Friday. Once we broke above it, there was bullish potential, but that was negated with the failure of the green fork, as described above.

Since the elliott wave count, and technical indicators, seem to be consistent with a 5th wave low coming up, we'll need to watch all of them and the pitchforks for signs of an end to the decline, assuming that we do get that move lower for the 5th wave down. 

If we start breaking above the black fork instead, then we'll have to monitor the behaviour of price within any new upward fork that may be formed to see if we may have ended the decline without that 5th wave (though as I've mentioned - see Friday's end of day update - we may already have had the 5th wave) of if we may still be chopping around in the 4th wave before the final drop.

10:36 BST - Dollar Update - 20 min chart

Looking at the 20 min chart of the dollar which shows the count off the 80.085 low, I'm thinking we may be getting an extended wave v up. You can see the bigger picture on the dollar page which I update on Friday night:

Dollar 20 min:

This count will be invalidated if we take out the wave iv low at 82.182. If this count is correct, we ought to see an acceleration up in wave [3] of v. I'd watch the low at 82.477; if taken out, it might be an early warning that this count is not playing out. If the labelling is wrong, it may be an expanded flat forming for wave iv which is a possibility I've mentioned before, ([A] would be the low marked iv, [B] the high marked (B)and [C] would be in progress).

This hourly euro/dollar chart seems to support more downside in euro/dollar and, so, more upside in the dollar index: its found resistance at the 50ma, the falling ichimoku cloud and the median line of the downward sloping pitchfork (its only a speculative one since the upper line isn't drawn from a pivot high). Obviously, the picture here will start to look less bullish for the dollar if we see these points of resistance start to get taken out:

Eur/USD 60 Min: