A new high was reached today on the S&P 500 and Dow Jones Industrial Average. A 1 minute chart of the action is above.
It is likely that a flat that began 1/11/10 completed Friday on these two indices. This appears to have been wave [iv] of C. The S&P 500 count is not clear, but the best option I have seen was provided by TBONE here. It takes advantage of the corrective waves seen 1/4/10-1/11/10 which are labeled as an ending diagonal (v) of [iii] wave. Wave iii would be the shortest wave within (v) however. Dan has also posted a count which has a better overall structure but wave [iii] does not subdivide well into an impulse.
The Dow Jones Industrial Average is still a better looking structure. The recent market action is still indicative of an unfolding ending diagonal as the chart above shows.
An impulse is nearing completion on the S&P 500 and, if following the above drawing, prices are at the top of the upper wedge line on the Dow Jones Industrial index. From an Elliott Wave perspective, the advance looks nearly complete. Even if the larger pattern is not clear or is slightly incorrect, this market is overbought. It will not be long until prices break down. We are waiting for prices to move below 1130 on the S&P 500 in addition to a decisive break of the longstanding trend line established last year.
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