4/21/10 - SPX EOD [10:00 PM PST Update Alternate Labels]

[10:00 PM PST Update Alternate Labels]

Just wanted to add the alternate labels for that leading expanding diagonal. It may need a little more time so we'll see.
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[3:55 PM PST Update H /S]

SPX - 15 MINUTE PREFERRED WITH H&S

SPX - 5 MINUTE PREFERRED WITH H&S

I forgot to include the larger possible head and shoulders formation on the 15 minute and a possible smaller scale 5 minute H&S targeting the 1180s.
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SPX - 5 MINUTE PREFERRED

SPX - 5 MINUTE ALTERNATE SUPPORTS THE EXPANDING ENDING DIAGONAL

I thought we would get some clarity today but that did not happen. I still show two very valid counts, which unfortunately indicates two different directions.

The top chart is the 5 minute preferred chart. It was pretty cool to see micro [5] top out almost exactly at the 100% Fib mark on that chart. The Fib markers represented the length of micro [1].

I have this labeled as the end of minuette (b). What follows it is where the counts diverge.

Based on my preferred, I see this as a possible leading expanding diagonal for subminuette i. In the Elliott Wave Principle, 10th Ed., page 40, Prechter writes, "This form appears to occur primarily at the start of declines in the stock market. These patterns were not originally discovered by R.N. Elliott but have appeared enough times and over a long enough period that the authors are convinced of their validity."

If this structure is correct, the bounce near the close today represents subminuette ii. I anticipate a 78% retracement as is typical for diagonals but 62% will also suffice, which is where price is now. A subminuette iii down should follow as the market works it's way down to 1150 or so. 

On the flip note, the second chart shows a 5 minute alternate that falls in line with the ending expanding diagonal. See this chart

After hitting the top of subminuette a, the decline that followed appears to be a double zigzag. Price retraced 38% and filled the open gap below at 1199.04 as expected in the previous chart for this alternate. See chart here.

The structure and the retracement levels have met the minimium requirements for a subminuette b wave. If this pullback is complete, I would expect one final 5 wave impulse higher to complete wave c for the expanding ending diagonal.

We will know soon enough which count will prevail. If 1210.99 (today's high) is taken out tomorrow, we will know that the alternate count is in play. Of course it is possible that the alternate count may require more downside retracement for subminuette b towards the 62% retracement level. So the easiest way to keep track is as long as 1210.99 holds, the preferred count is the one I'm trading.

GL!!