Elliott Wave Count Of S&P 500 (e-mini futures) Since Mid-February 2011

There are several legal wavecounts. The chart shows one of the relatively bearish ones, a five-wave downward impulse that bottomed on Wednesday, 16 Mar 2011:

ES Continuation Contract; 240-minute bars

(Click on image for larger view)

It’s also possible–and notably easier!–to count the same waves as either a double or triple zig zag. There are strong, non-Elliott Wave reasons to prefer such corrective wavecounts. Those corrective counts (not shown) will be proven correct if the ES makes a new high above 1338 before it falls below 1197.75.

On the other hand, if the 5-wave downward impulse wavecount (as shown) is correct, then what should follow now is a corrective (non-impulsive upward or sideways move that stays below 1338 (preferably well below,) followed by another motive wave down below 1241.25. Such a downward motive wave, it if happens, could either be yet another 5-subwave downward impulse, or an ending diagonal wave. That dowwave may, or may not, break below 1197.75. If it does fall below 1197.75, the implications could be severely bearish. If it can hold above that price, the implications could be rather bullish.

At this point, there is no Elliott Wave way to disambiguate. There are other reasons that make me prefer the bullish interpretation at this time. But I have identified the evidence that would prove me either right or wrong, and will let the market be the final judge. It’s always right.

Update: Here’s the analogous wavecount of the S&P 500 Index itself [60-minute bars]


(Click on image for larger view)

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