Sunday, 8/11/13 update

Very choppy market in the last few weeks in the ES/SPX with no real progress in either direction.  But, on balance, the evidence is that a significant top was made at ES 1705 last Monday.  All the indicators of an imminent top mentioned in the post of July 27 are still in place.  On top of those factors the EW now appears to have reached a conclusion of the run up from Jun 24 with the 1705.00 print of Aug 5, and the pattern since that time has only served to confirm that the top is in.  As can be seen, the pattern from the Aug 5 high into the Aug 7 low of ES 1680.50 is clearly a 5 wave impulse, and the pattern from that low into Friday's close is a choppy, overlapping corrective looking sequence.

So the preferred count at this point has 5 waves complete off the Jun 24 low into the Aug 5 high, with wave 1 of the move off that high bottoming on Aug 7 and a corrective bounce working it's way out since that low.

 Preferred count

  
There are a couple of ST alternates that should be considered:

Alternate #1

The 1st alternate is that the Minute W4 action since the Minute W3 top has been a running flat which only just terminated at the 1680.50 low of Aug 7.  In this scenario Minute W5 is in it's very earliest stages.  This alternate has to be counted as very low probability for the reason that running flats typically occur early in a trend rather than towards it's conclusion.  This is because the impetus for that type of correction is that the underlying trend is so strong that it skews the correction in the direction of that underlying trend.  If anything the bullish action of recent weeks can be characterized as weak, which mitigates against the possibility of a running flat to occur. 

Alternate #2

The 2nd alternate is that the short rally from the 1677.25 low of Jul 30 (end of the W4 triangle) into the 1705 top of Aug 5 is only the 1st leg of Minute W5, so the action since that top is wave 2 of the sequence with waves 3 through 5 yet to occur.  This also has a low probability IMO, but actually is more feasible than the running flat alternate.

So if a top is not in fact in place, it shouldn't be far away.