August 21, 2012 - Postmarket

The market actually... fell?

Though the ending diagonal setup was quickly disproven, my count suggests the top is in.  All requisite subwaves have been completed and we have conducted a hard intraday reversal.

Note that we have put up a confirmation of a bearish dragonfly doji (even more noticeable on the DJIA), and have RSI and CCI divergence and are overbought on full stochastics on daily, weekly, and monthly timescales.

The first order of the bears is to get a weekly reversal candle, which would be accomplished at 1405 but would look better at 1396.  The second order would be a breach of the 50-day moving average at 1365, which is approximately analogous to the thick blue line I drew in the first image.  The third order is final Elliott wave confirmation at 1329.

If Minute [c] = 1.618*[a], the target for [c] is 1174.  This would constitute a 17.7% decline from current SPX levels and would almost certainly have election ramifications.

A breach of today's highs at this point would put the bearish case seriously at jeopardy, and may indicate that the April-June decline was the whole of Minor B of (Y) of [D], rather than simply Minute [a] of it.  The target would then be well in the 1590s.

The most probable medium-term bull count as I see it is that what I have as Minuette (c) is in fact a 1 of 3, and the reversal doji signifies we have entered 2 of 3 for a needed technical correction.