Elliott Wave Update ~ 9 May 2012 [Update 6PM]

Update 6PM:  Using the Wilshire5000 for form, a close look at the wave count reveals that today's low actually makes a nice wave (i) low. We have a nice channel where i, iii, and v line up and ii and iv line up.  We also have wave iii extending almost a perfect Fib 2.618 (it was 2.567) times wave i. And then wave v is nearly identical to the length of wave i (.976)

We then had a three wave counter trend rally today.  That would be indicative of a single zigzag retrace. However if this is wave (ii), it would be preferable if prices retraced deeper upwards. Therefore a double zigzag to fulfill a higher price pattern would make sense here.

So bulls best chance is to follow through on an inverted head and shoulders pattern.

ORIGINAL POST
A look at the daily SPX shows today's bearish price action. After rallying to close the gap down, stocks were weaker into the close. The daily price closed beneath the July 2011 and recent April pivot support of 1356-1357.

Unable to regain the neckline, the near-term head and shoulders downside target is 1292 -support - to the 1300 range.  The 200 DMA at 1277 is also a meaty target.