EDIT 11:08 AM Sunday: Changed the references from "Monday" as of course Monday the markets are closed. I'm still groggy heh. The chart still says Monday but I'll be lazy. Thanks Iggy.
The move from 924.6 to 879.61 was a "textbook" 5 wave move. In fact EWI said as much in their Friday's update. I charted the first half of this wave on Thursday http://danericselliottwaves.blogspot.com/2009/05/microsquiggles.html correctly predicting that Friday would see the latter of the the wave play out and it did not disappoint. Its one of the better intraday calls I have made lately.
What is nice about this 5 wave structure is that it is clear. It gives us Elliott Wavers a "marker" to go by. We can take this 5 wave move and fit it into bigger structures which gives us a better guess on exactly where we are in the overall scheme of things.
As I surmised in Friday's update, this 5 wave move down can be a C wave in a 3-3-5 ABC flat from 930 peak. That is the obvious form and it works well with all the indexes. If your a permabear and think this market will just fall apart from here, you can see it as a subwave 1 of a much larger 5 wave structure down. (Perhaps even if it only a wave 1 subwave of a C wave down in an expanded/downward flat). Those two interpretations are probably the biggest considerations amongst all the wavers in the world and it has them going in 2 different directions.
I propose a less obvious, yet viable third option as a front half of a 5-3-5 zig zag in this 15 minute chart. Consider this an alternate of this chart I posted Friday http://4.bp.blogspot.com/_TwUS3GyHKsQ/ShXcf1gpGlI/AAAAAAAAAo0/Fumvj3bwlNY/s1600-h/spx301.png The problem with my Friday chart is that it may be too loose with timelines. I put it together assuming (a) = (c) in a 5-3-5 zig zag and since (a) was a sharp drop, (c) would take longer to play out. This chart could happen if [b] or (b) - since I changed the degree labels - moves higher Tuesday and Tuesday is an up day by chance.
So I made a new chart based on the same assumption that the 5 wave move was the front end of a 5-3-5 zig zag lower. I also took an assumption that since the (a) wave was a steep drop, perhaps the (c) wave would be only .618 x (a) considering that there was only (so far) a 38% corrective (b) wave.
I also, again, changed the degree labels as this is largely a guess at this point. I have an overall "idea" that the market is experiencing an Intermediate sized (X) wave and this should consist of a Minor ABC (blue). So don't be too bothered if I change the wave degree labels back and forth from time to time at the lower levels. I am not doing this at random, I am adjusting the degree as time goes on in this (X) wave. They are logical guesses. Intermediate waves take a while to play out.
Anyways back to the 15 minute chart and the 5 wave move down from 924.6. If we can assume this is the front half of a larger 5-3-5 zig zag, and we can assume that the market is going lower on Tuesday, then 869 is a possible target. 5-3-5 zig zags often have the length (price change) of (a) = (c) as a common relationship. However if the "(a)" wave is a substantial dropoff, sometimes the (c) wave is only .618 x (a). If we assume that the 896 high on Friday was the top of the (b) in this 5-3-5 zig zag, then .618 x (a) = 869. And you can see this is a support marker also.
Its just another attempt at nailing down a possible intraday move using wave technology. This pattern nails 869 as Tuesday's low and then a rally, perhaps of decent size late Tuesday carrying through to Wednesday. This kind of move would perhaps show positive divergence on at least this 15 minute chart.
The thing about these kinds of charts is that it is easy to tell if it is playing out or not which is why I make them and post them. A choppy downward struggle on Tuesday toward this target would be indicative. If it is appears the market is doing something else Tuesday, you can ignore this chart of course.