Now, from an Elliott Wave perspective, should the current non-confirmation hold, meaning the Industrials do not move above 15,676.94 on a closing basis, it could be indicative of a fifth wave truncation (failure), where the fifth wave fails to move above the high of the third wave. Now, this is where it gets a bit tricky. The intraday high of minor wave 3 is 15,542.40, but the closing high is 15,409.39. On Tuesday, October 22, 2013, the Industrials closed at 15,467.66, above the May 22, 2013 minor wave 3 high at 15,409.39. R.N. Elliott used closing prices, so on a closing basis, using this wave count, minor wave 5 has moved above the high of minor wave 3. On an intraday basis, however, it has failed to do so.
There is also another potential alternate count I am considering which suggests the August 28, 2013 low of 14,760.41 marked the end of minor wave 4, and the move to 15,709.58 on September 18, 2013 marked the high of minor wave 5, intermediate wave (C), primary wave Y, cycle wave b, and thus the bear market rally itself. Please see illustration below:
Due to the new high on the S&P 500, I favor the below count. The only aspect of this count that is less than ideal is the fact that a running flat is normally indicative of underlying strength in the larger trend, and thus would not favor a fifth wave truncation. But, nothing is written in stone that says the fifth wave has to truncate, or that it can't. We just have to let the market show it's hand and show us which one of these counts is correct, if either of them. Remember, Elliott Wave Analysis is all about probabilities, not certainties.
In summary. This bear market rally that started in March 2009 is getting very aged and thus extreme caution is warranted for the violent reversal and the start of cycle wave c down, the most destructive leg of the bear market to date, and the final decline in this supercycle wave (a) bear market.