The triple zigzag structure now serves as the primary count for the hope rally, with the end of wave [X2] correction likely in sight.
As the notes on the Chart 1 indicates, [X2]=0.629[X1] at 1239.27, roughly at today's SPX low of 1234.56. Odds favor the end of [X2] around current levels. Note also that [X2]=[X1] at 1161.69, which would be the next logical target area for [X2].
If the low is in, a projected upside target is 1426 where wave [Z] vs wave [Y] is the same proportion as wave [Y] vs wave [X].
Chart 2 offers top tracking counts for this multi-month correction [X2].
[green] zigzag - triangle - zigzag, likely ended today.
[blue] flat - zigzag - flat, with more declines to come.
If the hope rally is over, [red] shows a truncated top with the final wave as an expanding EDT. Look out below. The red count is consistent with structure in NDX that meets the minimum requirement of a top.
A passable five wave advance from today's low
See Chart 3. There's risk of rushing the count a bit, but it represents a passable five at the moment. It might be a leading diagonal - we'll find out soon enough.QE3 tracking
Wall Street Journal (Aug 3, 2011, 1:10PM) Former Top Fed Officials Signal Support For QE3 If Inflation Slows
http://blogs.wsj.com/economics/2011/08/03/former-top-fed-officials-signal-support-for-qe3-if-inflation-slows/
See Revelations (8/2/11) for additional thoughts.
[11am] Count update (SPX, ES)-
Today's decline is now too deep for the purple EDT wave Y-down (unless it is an expanding one). We are now left with two corrective counts - a post triangle thrust down (green) or a larger 5-wave decline from the July high, assuming the top is not in.
[805am] Overnight update (ES) -The three corrective tracking counts on ES. See the cash version in Chart 1 of Revelations (8/2/11)
