SPX: Elliott Wave roundup

(charts borrowed from some blogs that I follow)

Base Scenario: Rally Continues

• My main scenario (60% probability) is for the rally in US markets from the March 2009 low to continue after the break in 2011
• The economic numbers are slowly recovering in the US and growth is positive
• Any easing of war tensions in the Iran should take oil prices down, providing additional spending power to consumers
• Any additional relief to distressed European Sovereigns and Financials should lift the pall of gloom over potential European exposure in US financials
• Most likely we are going to see another minor correction and then accelerate into a third wave that will launch the next leg up of this Primary bull market

Alt Scenario 1: Imminent Return of the Bear Market

• Most Elliott-Wave sites now seem to have this count as their main count
• Summer 2011 correction was an initial leg down (1 or A)
• We are in a counter-trend bounce (2 or B) that should complete around SPX 1300-1350 (See Scenarios 1a and 1b after this)
• A sharp C or 3rd wave down is imminent and should be quite severe
• Short-term: Topping
• Medium Term: Bearish

Scenario 1a: Ending Diagonal into SPX 1300+-25

• This is the most likely way Scenario 1 will play out 
• We are in a multi-month ABC wave since the October lows 
• The C wave started in December and is forming a "rising wedge" or Ending Diagonal
• Once complete, this should result in a quick reversal to 1150
• Wave 5 should be smaller than wave 3 (currently wave 3 seems to have completed at 80 points)
• Short-Term: Topping
• Medium-Term: Bearish

Scenario 1b: Triple Combination into SPX 1300-1325

• Very similar to Scenario 1a in outcome but slightly different in structure
• We are in a wave C of a multi-month  A-B-C from the October bottom (marked in RED below)
• The RED C wave began in late December and sub-divides into an ABC marked in BLUE
• We are in the BLUE minor 'C' subdivision of the larger RED C wave 
• Short-Term: Topping
• Medium-Term: Bearish

Scenario 2: Double Zig-Zag from the March 2009 lows

• This would behave very similar to the Base Scenario - a rally over the next few months
• We need to see acceleration with a clear impulsive structure for C
• 1440 is a good target for this scenario as it is the extreme of the B wave in 2008
• Once C wave completes, it would be followed by a severe bear market 
• Medium-Term: Bullish
• Long-Term: Bearish