A Bearish Elliott Wave Count - But is it Correct?

Yesterday’s price action in the cash S&P500 is classified as “uptrending”. While I continue to watch the key levels of 1396.02 and 1324.35 I present today my current Elliott Wave view of the market since last October’s high.

To put this action in perspective, I believe that the bull market (defined by five complete upward waves) which began in 1982 (basis the cash S&P500) is not over. The high in 2000 marked the end of wave 3 up. Since then I think we have seen waves A and B of wave 4 down. Wave A completed in October 2002 and Wave B this past October. Therefore we are now in Wave C of wave 4 down.

The immediate question is whether or not the low of 1256.98 set on March 17 was significant (i.e. a low that will last for months). I think the market is in the process of answering that question now. My preferred wave count says “no”. If we are ending the terminal impulse (Ending Diagonal) pattern from March 17 then we should see a move down to retest the lows over the coming couple of weeks.

Let’s see what happens.