Where We Stand, Part III: The S&P Shorter Term

In the last post we evaluated the possibility that the SPX was currently in a Primary-level [D] wave up from 666.  In such a case, the internal count of the wave might look something like this:

In other words, as I see it, we are currently in the late stages of Minute [b] of B of (Y) of [D].  When it concludes, the next step is a Minute [c] wave down in a mirror of the summers of 2010 and 2011 that will take us down to most likely the lower 1100s (the trendline from the June 2010 and Oct. 2011 lows).  The subsequent step would be a screaming rally up into the 1500s and likely to new all-time highs.

Zooming into Minute [b] gives us the following:

We are currently in Minuette wave (e) or (z) (whichever you prefer) which probably should make it up to the upper channel line (currently into the 1380s) but may not make it there.  In fact, the market could theoretically roll over at any time, though would look better with at least one more fractionally higher high relative to this morning.

A breach of the lower trendline would mean Minute [b] is definitively over and Minute [c] underway, target 1125.  A breach of the upper trendline would invalidate this count and likely would suggest a more bullish alternative.

The primary alternative long-term count is that the move up from 666 is itself a triple zigzag at primary level, as shown in the below graph.

In this chart, 1422 is the high terminating Intermediate (Z) of whatever Primary wave it is (my [D] or Prechter's [2]).  The count for the up move from June is Minor 2 (in which we are currently finishing up Minute [e/z]), with Minor 3 down to follow.

1125 is a perfectly valid target for a Minor 3 down; the difference between that and the more medium-term bullish count I offer above is what will happen afterwards.  If Minute [c] of B of (Y), then Minor C of (Y) should kick in, which would be a strong rally likely to new highs.  If Minor 4 of (1) of [E/3], the rally should only be weak and probably resemble a bear flag.