After my time away, the large view remains the same; primary wave [2] higher, or some other other corrective wave since the March 2009 lows, has completed with corrective waves higher (sideways) following. The S&P 500 will eventually move below 900 after the current correction, labeled flat wave 2, completes.
The labeled wave 1 has nearly been fully retraced. Obviously a truncated wave C of (Z) is not particularity desirable, so the completion of wave [2] can be moved to an April level using the alternate count suggested here. This alternative may be less probable on a variety of scales so the labellings above have not been modified.
The rally since 8/31/10 has been quite substantial in time and price. The rally now has an impulsive form but with a corrective feel given the broken guidelines within it; consider the retracement level of (ii) and the length of (iii) in relation to (i). This and the larger context presented in previous updates make it a good fit as the completing wave [c] of flat wave 2.
Even though many guidelines were broken, note that all labellings above within [c] alternate between sideways and sharp corrections. This has been a very typical feature within rallies of this scale.
Following sideways wave [4] of iii of (iii) and sharp wave iv of (iii) (as predicted last week), there was the above price action. A clear impulse wave higher (wave v of (iii), also expected) was followed by a choppy sell-off. The top of (iii) is debatable, but a double flat seems to be the best fit and alternates well with (ii).
Following the correction was a big up day Friday with surprisingly good breadth but with poor volume. The form of this rally is very corrective. The S&P futures are currently up 4 points indicating a continued advance Monday. If the market moves above Friday's high Monday, this will add more certainty of a corrective wave beginning 9/23. Because of the size of wave (iv), a correction higher is likely wave i of ending diagonal (v) higher. (v) should complete days from now, maybe even the following week, in the 1160s.
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