Here's an Elliott Wave count for the S&P 500 to frustrate bulls AND bears

Both bulls AND bears would be frustrated by this Elliott Wave alternative, if the S&P 500 can remain above its November 2008 lows but isn't ready to move higher in a bear market rally yet. In fact, the potential of frustrating both camps could be an independent reason for this hypothetical to have merit. A second reason is that the SPX may need more time on the charts before ultimately rolling over under 741, yet it may not really have the strength to move much higher right away.

Also - I had started to think that this scenario might fit T Theory as well as some of the cycles folks' time cycles. However - Terry Laundry has issued an update to his T Theory. Up until Friday, he had been projecting S SPX to the ~750 level. Actually, previously in January he was projecting to new lows under 741, then he had adjusted his target to approximately 750 or 760.

Here's what he remarked on Friday (you can see at his site, listed in "other sites of interest" at right side of this page):

T Theory Observations for February 2009
Special Update for Noon Friday Feb 6- Today's strength is likely to confirm the beginning of a new T and its rally should continue for some some time. Like most bear market rallies it will amount to some % retracement of the recent decline, rather than a new bull market. My regular update will follow on Monday.

Well, I'll go ahead and put this Elliott Wave alternative out there anyway. And it's an Elliott Wave count suggestion of my own, not Tony Caldaro's (despite the default label on this post) ... so for what it's worth: The idea is that we've completed Wave (A) up, and only did part of the (B) wave down. Meaning the (B) wave needs to finish its own ABC, and the B part of it isn't finished yet ... so the S&P500 will go up to 890, which is about .618 retrace back to ~943 (also consistent with ChartsEdge's weekly cycle chart for the SPX this week) to complete a smaller B-wave high. Then drops in a C-wave to complete the larger (B) pullback, at about 750. It would work from a Fibonacci standpoint, because this scenario would have the C-wave = the A-wave ... and 750 would also be the number that's 1.382 times the A leg itself.

This could be consistent with the banking and transport indices continuing to work out their lows, while the Nasdaq gets a head start on its bear market rally higher. (Unless banking is done and moves with the Nasdaq, while the transports and other sectors do remain working out their lows.) Here's a chart of the SPX with this hypothetical scenario marked so you can see what it might look like: