Sunday, May 30, 2010

S&P 500 ~ Elliott Wave Count 30 May 2010

The bears have returned. In May the SPX lost 100 points closing at 1089.

In spite of the recent drop of almost 15 % I can't say yet that the bear market has resumed. The next days/weeks should show whether we're indeed on the way to SPX 500 and lower.

The Elliott Wave count I posted during Friday still looks good:

The question is whether wave [ii] is completed (double Zigzag) or if there is one more Zigzag to come early next week to 1110-20 (triple Zigzag). If the SPX exceeds 1100 it's most likely a triple Zigzag, while on a drop below 1085 the double Zigzag count should be the right one with confirmation below 1066. I prefer the double Zigzag because I don't think that the market should exceed the hourly MA 76 (currently at 1103).

Medium term the market will either crash or rally... great... : ))

I think that the SPX finished wave [ii] or will finish it within the next few days. Wave [iii] should take the index down to 900ish within a few weeks. Important levels are 1066 and 1040 - a drop below the latter confirms wave [iii].

There is also the possibility that we finished an ABC from 1220 at 1040:

So, the market should rally from here. First condition for this count is a rally next week to 1110-20 without declining below 1066. This rally should be followed by a correction to 1070-90 and then a rally above 1174. Confirmation for this count we don't get until 1220 is exceeded (>1174 should be almost a confirmation though).

Long term both counts, the medium term bearish and bullish, will lead to a big crash. The next days and weeks should help to determine whether a Primary [B] or [2] finished at 1220 and Primary [C] or [3] to SPX below 500 is underway OR whether Primary [C] to 1600 will complete cycle wave d of an Expanding Triangle started in 2000 (see here to get the idea). Cycle wave e should follow then with the same target of SPX 500ish and lower.

Have a very nice week ; )