Yet, using the hourly cash chart, and The Eight Fold Path methodology, we can see one "last gasp" bullish chart that we must at least "consider" as a viable alternate. That chart is below.
|Figure 1 - Last Gasp Bullish Alternate for the Hourly S&P500 Index|
So, with 117 hourly bars currently on the chart, it is 'possible' to see an impulse still in progress. We do have four waves on either side of the EMA-34 which has good form and proportion, but there are problems with this wave when compared to the ideal Eight Fold Path methodology. First, we do not have wave iii (circle iii) on a maximum of the Elliott Wave Oscillator. In short, the wave has "turned to the right", and shows poor momentum. That has been characteristic of many waves in this bull market, and while we expected that, this is one of the first waves in which wave iii would not have even reached equality with wave i.
Below is a chart of the SP500 5-min cash index. As the wave is shown, wave i (circle i) is a very nice expanding leading diagonal off of the top. We know that it is because there is more than a 1.618 extension wave that follows it. In fact, wave iii (circle iii) is 2.618 times wave i (circle i).
|Figure 2 - Cash S&P 500 Index 5-minute Chart of Today's Down Wave|
At present, there "is" alternation in the price pattern. Wave ii (circle ii) starts out with only three waves up to (w) in a deep retrace of the diagonal - as should be expected - and then, there is a 90% wave down to (x) which makes the overall sequences a "FLAT" or "sideways" wave. Then, there is a clear three waves up to (y) of ii (circle ii) in a very slight truncation - indicative of the long, high momentum drop to follow. Then, as it currently stands, wave iv (circle iv) is currently as sharp or zigzag wave which would provide the alternation - provided the wave ends in this area.
We have seen fourth waves like this wiped out by spikes higher on news or overnight futures movements, so all we can say is "IF" there is a non-overlapping wave iv (circle iv) - which by virtue of alternation should be the sharp, shown, or morph into a triangle - not shown - that is followed by a clean fifth wave down, then we would likely have a true impulse lower.
If the fifth wave down does not occur, the odds of the count in Figure 1 increase. If it does occur, then the odds of a continued correction begin to take the lead. Right now the odds are about 45:55, continued impulse higher, versus continued impulse, lower. Tomorrow's opening range will be key.
It is not yet worth going through the multiple Primary V scenarios higher (for impulses or diagonals) at least until we see if the impulse downward completes in satisfactory fashion. Stay tuned, it's getting interesting out there. It is worth noting that the Whilshire 5000 Index, did make a new all time high yesterday - further validating Primary V, but the $NYA and the $RUT have not yet.