3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures fell back during the session, returning to the 5230s. Applying Elliott Wave Theory, the decline is a 4th-wave correction within the the final subwave of the 3rd-wave uptrend that began on May 2. All of this is happening within the 1st subwave of a 5th-wave uptrend that began on April 18.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose after trading resumed overnight, traveling from the 5230s to the 5260s

What does it mean? The 5th-wave uptrend that began on April 18 continues. I’ve adjusted my analysis of the subwave structure of that uptrend in order to avoid a violation of a rule in Elliott Wave Theory. As things had played out, the 3rd subwave buried two-degrees deep within the chart, was the shortest of the two preceding trending waves within the structure. Not allowed.

Under the two principal analysis, the 5th wave that began on April 18 continues to be in its 1st subwave. Within that subwave, however, what I had counted as a 5th wave (a sub-subwave?) is now labeled as a 3rd subwave.

A 4th-wave correction lies ahead, and then a 5th subwave to complete the 1st segment of the April 18 rise.

On the chart each wave number is followed by a subscript denoting the wave’s degree, as its distance from the Intermediate degree within the complex fractal structure of price movements. The present Intermediate degree wave began in December 2018 and is labeled wave 5{0}.

The waves discussed above appear on the chart as follows: Wave 5{-5}, which began on April 18, is in its initial subwave, wave 1{-6}. One degree lower, Friday’s chart had labeled the April 23 peak as being the end of wave 3{-7}. A rule of Elliott Wave Theory required that it be relabled as wave 1{-7}, and that’s what today’s chart shows. That reanalysis means that wave 3{-7} began on May 2 and is still underway and is in its 5th and final subwave, wave 5{-8}.

What are the alternatives? The need to rework the degree analysis is an illustration of the ambiguity that is often encountered in Elliott Wave analysis. Sometimes the price movements on the chart lack clarity in terms of Elliott Wave Theory.

[S&P 500 E-mini futures at 3:30 p.m., 200-minute bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 1{-6} is underway and is in its middle subwave, wave 3{-7}, which is in its initial subwave, wave 5{-8}.
• Wave 5{-8} is in its final subwave, wave 5{-9}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, May 13, 2024

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures rose back into the 5260s and then declined into the 5230s. Elliott Wave Theory: The peak, 5264, marks the end of the rising 3rd subwave and beginning of the declining 4th subwave within a 5th-wave uptrend that that began on May 8. The 4th subwave will be followed by rising 5th subwave that will complete the parent 5th-wave uptrend.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight into the 5260s and then fell slightly as the opening bell approached.

What does it mean? In the terminology of Elliott Wave Theory, the small-degree 5th-wave uptrend that began on May 8 continues. It is a subwave of a 1st-wave uptrend that began on May 2, which in turn is the initial subwave of a larger 5th-wave uptrend that began on that date.

At the larger degrees, the May 2 uptrend is a subwave of 1st-wave uptrend that began on April 13, the initial subwave of a 5th-wave uptrend that began on that date. When that 5th-wave uptrend is complete, it will also mark the end of the 3rd-wave uptrend that began on February 21.

At this point we’re looking at waves that can make or break market optimism for months or a year.

The Chart

I’ve pulled the chart back for a broader view, tracking the uptrend that began in late January.

The chart labeling follows the wave number with a subscript in curly brackets denoting the wave’s relationship with the Intermediate degree within the fractal structure of the chart. The current Intermediate degree is wave 5{0}, which began in December 2018.

The waves discussed above, from smaller to larger, are wave 5{-9} within wave 1{-8}, a subwave of wave 5{-7} within wave 1{-6}, which in turn is a subwave of wave 5{-5}, an uptrend that began on April 18, which is a subwave of wave 3{-4}, an uptrend that began on February 21.

What are the alternatives? An ambiguity in the chart has been with us for some time. This section is largely unchanged from the day before. In my principal analysis, I’ve counted the 5th wave that began on May 2 (wave 5{-7} on the chart) as being in its 1st subwave (wave 1{-8} on the chart). It’s possible that the subwave of wave 1{-8} (wave 4{-9} on the chart) is in fact the immediate subwaves of wave 5{-7} (wave 4{-8}), meaning that the 5th-wave uptrend is further along than the principal analysis would have it.

[S&P 500 E-mini futures at 3:30 p.m., 190-minute bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 1{-6} is underway and is in its final subwave, wave 5{-7}, which is in its initial subwave, wave 1{-8}.
• Wave 1{-8} is in its next-to-the-last subwave, wave 4{-9}.

Alternative Analysis:

• Wave 1{-6} is underway and is in its final subwave, wave 5{-7}, which is in its next-to-the-last subwave, wave 4{-8}.
• Wave 4{-8} is in its 1st subwave, wave A{-9}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, May 10, 2024

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures rose above the starting point of the 4th-wave downtrend that began on May 7. The rise can be interpreted in two ways:

• The 4th wave ended at the May 8 low, 5188.75, and the ensuing 5th wave began from that point
• The May 8 low was the end of wave A within the 4th-wave downward correction, and the rise that followed is wave B, the second of three subwaves.

I’m going with the 4th-wave-ended interpretation for my principal analysis, as it seems to be a better match for the internal subwaves. I can’t rule out the 4th-wave-continues interpretation entirely.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell into the 5190s overnight, rising into the 5210s as the weekly unemployment insurance claims data was released.

What does it mean? Elliott Wave Theory sees the rise as a subwave within a low-degree 4th-wave downward correction that began on May 7, part of a larger 1st-wave uptrend, the initial subwave of a still larger 5th-wave uptrend that began on May 2.

All of this is happening within a series of nested uptrending waves within a large 5th-wave uptrend, of what Elliott called the Intermediate degree, that began in December 2018.

And while bullish traders and the financial press will cheer for so much uptrendiness within the fractal complexity of the chart, I always keep in mind that every uptrend, without exception, is followed by a downtrend. In Elliott Wave terminology, every motive wave up and down the fractal structure is followed by a corrective wave.

On the chart, the waves are labeled with the wave number followed by a subscript denoting the distance in degrees from the Intermediate degree, wave 5{0}, underway since December 2018. The waves discussed so far, when viewed on the chart, are downward corrective wave 4{-9} within wave 1{-8} within uptrending wave 5{-7}. The wave numbers listed on the upper right of the chart are the nested uptrending waves that will dominate the market for years to come.

What are the alternatives? There is an ambiguity in the chart, a not unusual occurrence in Elliott Wave Theory. In my principal analysis, I’ve counted the 5th wave that began on May 2 (wave 5{-7} on the chart) as being in its 1st subwave (wave 1{-8} on the chart). It’s possible that the subwave of wave 1{-8} (wave 4{-9} on the chart) is in fact the immediate subwaves of wave 5{-7} (wave 4{-8}), meaning that the 5th-wave uptrend is further along than the principal analysis would have it.

[S&P 500 E-mini futures at 3:30 p.m., 40-minute bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 1{-6} is underway and is in its final subwave, wave 5{-7}, which is in its initial subwave, wave 1{-8}.
• Wave 1{-8} is in its next-to-the-last subwave, wave 4{-9}.

Alternative Analysis:

• Wave 1{-6} is underway and is in its final subwave, wave 5{-7}, which is in its next-to-the-last subwave, wave 4{-8}.
• Wave 4{-8} is in its 1st subwave, wave A{-9}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, May 9, 2024

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures returned to the 5210s during the session, coming within a point of the overnight high. Elliott Wave Theory: The 4th-wave downward correction within the 5th-wave uptrend that began on May 2 continues.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell overnight, from the 5110s to the 5080s.

What does it mean? Elliott Wave Theory sees the decline as a 4th-wave downward correction within the 1st subwave of a larger 5th-wave uptrend that began on May 2.

Corrections usually take of two patterns: A Zigzag, with five subwaves within the first subwave — wave A — or a Flat, with three subwaves within wave A. So far wave A is in its 3rd subwave.

The correction is of a small degree within the complex fractal structure of the chart. The preceding 3rd wave took only two days to complete, and I would expect the 4th wave to be short-lived.

The 4th-wave will be followed by a rising 5th wave, a subwave of the larger 5th wave. When complete, the smaller 5th wave will also mark the end of the larger 5th wave, which in turn will mark the end of the 1st subwave within the still larger 5th wave.

What are the alternatives? There’s an alternative way of analyzing the chart. In my principal analysis, I’ve counted the 5th wave that began on May 2 (wave 5{-7} on the chart) as being in its 1st subwave (wave 1{-8} on the chart). It’s possible that the subwave of wave 1{-8} (wave 4{-9} on the chart) is in fact the immediate subwaves of wave 5{-7} (wave 4{-8}), meaning that the 5th-wave uptrend is further along than the principal analysis would have it.

[S&P 500 E-mini futures at 3:30 po.m., 35-minute bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 1{-6} is underway and is in its final subwave, wave 5{-7}, which is in its initial subwave, wave 1{-8}.
• Wave 1{-8} is in its next-to-the-last subwave, wave 4{-9}.

Alternative Analysis:

• Wave 1{-6} is underway and is in its final subwave, wave 5{-7}, which is in its next-to-the-last subwave, wave 4{-8}.
• Wave 4{-8} is in its 1st subwave, wave A{-9}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, May 8, 2024

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures peaked at 5226.75 during the session and then fell swiftly back into the 5210s. Applying Elliott Wave Theory, the decline is the beginning of a 4th-wave downward correction within the 5th-wave uptrend that began on May 2.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures traded narrowly overnight, swinging between just above 5200 and the low 5210s.

What does it mean? In the terminology of Elliott Wave Theory, the pause is part of the 3rd subwave within the larger initial subwave of a 5th-wave uptrend that began on May 2.

The 5th wave is the final wave within a still larger 1st wave. When the present 5th wave is complete, it will mark the end of the 1st wave and the beginning of a 2nd wave downward correction.

This is all happening within a still larger 5th wave that began on April 18.

I’ve moved the chart closer in for a more detailed view of the 5th wave’s internal structure.

The waves on the chart are labeled with the wave number, followed by a subscript that shows the wave’s distance from the Intermediate degree, a large wave formation labeled wave 5{0}.

Deep within wave 5{0}, from smaller to larger, the present wave set is wave 3{-9} within wave 1{-8} within the 5th-wave uptrend, wave 5{-7}, within wave 1{-6}.

What are the alternatives? There is, however, an ambiguity. Are the waves labled in the chart as being of {-9} degree actually that small, or are they actually one degree higher in the fractal hierarchy, degree {-8}. If the {-9} designation is correction, then the 1st wave is still underway and the uptrend still has much further to go. If the {-8} designation is correct, then the uptrend is about halfway done.

My principal analysis best reflects the time it has taken waves of degree {-8} to reach completion, but the alternative analysis is not entirely far fetched, given the wide variation in how waves behave.

[S&P 500 E-mini futures at 3:30 p.m., 35-minute bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 1{-6} is underway and is in its final subwave, wave 5{-7}, which is in its initial subwave, wave 1{-8}.
• Wave 1{-8} is in its middle subwave, wave 3{-9}.

Alternative Analysis:

• Wave 1{-6} is underway and is in its final subwave, wave 5{-7}, which is in its middle subwave, wave 3{-8}.
• Wave 3{-8} is in its middle subwave, wave 3{-9}

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, May 7, 2024

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures rose during the session, coming within half a point of 5200. Elliott Wave Theory: Uptrending wave 5 continues its 3rd subwave. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight, from the 5150s to the 5170s.

What does it mean? Applying Elliott Wave Analysis: The 5th-wave uptrend that began on May 2 continues and is in its 1st subwave of five. The first wave will have five subwaves total and is presently in its 3rd subwave.

The 1st subwave within the 5th wave uptrend will be followed by a 2nd wave downward correction that will remain above the starting point of 1st subwave, 5036.25. A rising 3rd subwave will follow, usually the largest and most energetic subwave of a trend, called a “motive wave” in Elliott Wave Analysis.

What are the alternatives? The degree of the subwaves of a price movement are always uncertain in the early stages of the move. The principal analysis described above, lists three subwaves within a larger 1st subwave. It could well be that the three smaller subwaves are in fact larger relative to the uptrend.

It’s all a matter of degrees, the position of a wave within the fractal structure of the price movements. On the chart each wave number is followed by a subscript in curly brackets showing the wave’s degree as number of degrees distant from the Intermediate degree, which at present is wave 5{0}, a very large wave that began in December 2019.

Under the principal analysis, the waves now underway and their degrees are wave 3{-9} within wave 1{-8} within the uptrend, wave 5{-7}. Under the alternative analysis, the current waves and degrees are wave 3{-8} within wave 5{-7}.

[S&P 500 E-mini futures at 3:30 p.m., 70-minute bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 1{-6} is underway and is in its final subwave, wave 5{-7}, which is in its initial subwave, wave 1{-8}.

Alternative Analysis:

• Wave 1{-6} is underway and is in its final subwave, wave 5{-7}, which is in its middle subwave, wave 3{-8}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, May 6, 2024

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures remained slightly below the session peak, 5166.75, as the closing bell approached. The 5th-wave uptrend that began on May 2 continues. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rapidly rose by 50 points after the latest Employment Situation Report was published.

What does it mean? Applying Elliott Wave Theory, the rise carried the price above the prior high of the 4th-wave downward correction that began on April 23 and above the end of the preceding 3rd wave.

The power of the rise suggests that the downward correction ended at the May 2 low, 5036.25, and that a 5th-wave uptrend has begun.

Fifth waves have a lot of variation in their behavior. Not all make it above the end of the preceding 3rd wave. Some make it far past that point. This 5th has broken past the end of wave 3, suggesting that this 5th wave will be on the longer side.

What are the alternatives? I was head-faked by a rise Thursday morning, and today’s rise could be another. The higher the price rises, the more likely wave 5 is underway. If it reverses and falls below the start of the 5h wave — 5036.25 in this case — then the likelihood increases that the 4th wave correction is still underway.

[S&P 500 E-mini futures at 3:30 p.m., hourly bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

1. Rising wave 5{0} is underway. It is a wave of Intermediate Degree that began in December 2018.
2. It is in its final subwave, wave 5{-1}
3. Within wave 5{-1}, rising waves 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
4. Wave 1{-6} is underway and is in its final subwave, wave 5{-7}, which is in its initial subwave, wave 1{-8}.

We Are Here.

These are the waves currently in progress under my principal analysis. Each line on the list shows the wave number, with the subscript in curly brackets, the traditional degree name, the starting date, the starting price of the S&P 500 E-mini futures, and the direction of the wave.

• S&P 500 Index:
• 5{+3} Supercycle, 7/8/1932, 4.40 (up)
• 5{+2} Cycle, 12/9/1974, 60.96 (up)
• 5{+1} Primary, 3/6/2009, 666.79 (up)
• 5{0} Intermediate, 12/26/2018, 2346.58 (up)
• S&P 500 Futures and index:
• 5{-1} Minor, 10/13/2022, 3502 (up) (futures), 3491.58 (up) (index)
• S&P 500 Futures:

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, May 3, 2024

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. Well, that was an interesting head-fake. Or was it a head-fake?

This morning’s analysis marked the May 1 low, 5037.75, as the end of the 4th-wave downward correction and the start of a 5th-wave uptrend. After a rise into the 5090s overnight, the S& P 500 futures fell, reaching below that low, to 5036.25, during today’s session.

If wave 5 is taking the form of an impulse wave, which nearly all of them do, then the lower low broke a rule of Elliott Wave Theory and wave 4 is still underway. And that’s how I’ve re-arranged the chart for this afternoon’s update.

There are a few exceptions to the rule, such as in the case of a truncated fifth wave or a diagonal triangle formation, but they are rare patterns. In most cases, a breach of the wave 4 low by wave 5 invalidates the impulse wave count.

So the principal analysis is back to having the 4th wave still underway, unless, of course, today’s session low is the end of the 4th wave. If it was, then the 5th wave has begun again.

I find Elliott Wave Theory to be useful, despite the ambiguities. But it’s not a very popular tool among analysts. Why might that be?

There are many reasons. Among them,

1. Subjectivity: Elliott Wave analysis is often characterized as subjective, since different analysts can vary in how they interpret a chart.
2. Complexity: The theory involves complex rules and guidelines, which can be challenging to understand and apply correctly.
3. Hindsight bias: Critics argue that Elliott Wave Theory is prone to hindsight bias, where wave counts are often adjusted to fit the historical data. (To which I reply, “Duh. Of course. Historical data is all we have.”)
4. Lack of a specific trading system: While Elliott Wave Theory can help identify market trends and potential reversal points, it does not provide a complete trading system with specific entry, exit, and risk management rules. Traders need to use other tools and strategies in conjunction with Elliott.
5. Difficulty in application: Applying Elliott Wave Theory to real-time market conditions can be challenging, as the wave counts may not always be clear.

All true. And with that in mind, here’s this afternoon’s Elliott Wave Theory chart, revised after this morning’s analysis fell victim to Reason #5 in the list above:

[S&P 500 E-mini futures at 3:30 p.m., hourly bars, with volume]

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight at a measured pace, so far reaching into the 5090s.

What does it mean? The price remained above the May 1 low, 5037.75, strengthening the Elliott Wave Theory analysis that the 4th-wave downward correction that began on April 25 ended at that point, and a 5th-wave uptrend began.

Fifth waves are, well, a bit flaky. The idea model of an uptrend tells us that they should move above the end of the preceding 3rd wave — 5128.75 in this case — but in the real world such uptrends sometimes fall short of that point, and sometimes they extend and rise far beyond expectations.

What we do know for certain is the impact the 5th wave will have when it ends. In terms of the degree of this wave five, it is seven steps below Intermediate degree. The present Intermediate degree is also a 5th wave, which began in December 2018 and is in its 5th subwave.

The end of the smaller 5th wave that just began will be the end of a 1st wave one degree larger, which work its way through four more waves after the 1st, waves 2 through 5.

The end of that 5th wave will mark the end of a 3rd wave, one degree higher, and the beginning of a 4th-wave downward correction followed by a 5th-wave rise.

That sequence will again be repeated, one degree higher, and then again, and then again, with the last 3rd-4th-5th waves pattern being five degrees larger than the 5th wave that just began.

It is in the next step, six degrees larger, that the pattern will break. the end of that 5th wave will also be the end of two more 5th waves of increasing size that will mark the end of the present Intermediate 5th wave that began in 2018, and also of three additional 5th waves, each one degree higher than the one before it.

I think of the 4th-wave / 5th-wave sequence now underway as the calm before the storm. And what a storm it will be.

Waves on the chart have a wave number followed by a subscript in curly brackets that denote the relationship of that wave to the Intermediate degree. Here is the sequence of waves now underway, described in that way, from smaller to larger: Waves 5{-7}, 1{-6}, 3{-5}, 3{-4}, 3{-3}, 3{-2}, {5{-1}, 5{0}, 5{+1}, 5(+2}, and 5{+3), the first (smallest) wave having begun on April 1, 2024 and the final (largest) wave having begun on July 8, 1932.

Needless to say, it will take a while for all of this to work itself out.

What are the alternatives? None at present. They will develop, without a doubt.

[Superceded by the afternoon analysis.]

[S&P 500 E-mini futures at 9:35 a.m., hourly bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate Degree that began in December 2018.
• It is in its final subwave, wave 5{-1}
• Within wave 5{-1}, rising waves 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Morning chart: Wave 5{-7} is in its initial subwave, wave 1{-8}.
• Afternoon chart: Wave 4{-7} is in its final subwave, wave C{-8}.

And here are the waves of Intermediate degree and larger mentioned in the discussion, as recorded in the S&P 500 index.

• 5{+3} Supercycle, 7/8/1932, 4.40 (up)
• 5{+2} Cycle, 12/9/1974, 60.96 (up)
• 5{+1} Primary, 3/6/2009, 666.79 (up)
• 5{0} Intermediate, 12/26/2018, 2346.58 (up)

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, May 2, 2024

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures rose sharply as Federal Reserve Chair Jerome Powell began his news conference, which followed an FOMC decision to keep the Federal Funds Rate unchanged.

The count is ambiguous. The overnight low, 5037.75, could well be the end of the final subwave, wave C, of the 4th-wave downward correction that began on April 23, given the the distance travelled by the rise during the session. But that low can also be counted as the end of the middle subwave within the C wave.

I’ve retained this morning’s chart, showing the 4th wave still underway. And am including a new chart with this afternoon’s possible analysis, showing the 4th wave is complete and the 5th wave uptrend has begun.

A tentative analysis:

[S&P 500 E-mini futures at 3:30 p.m., hourly bars, with volume]

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell further overnight, reaching into the 5030s and then rising slightly.

What does it mean? The decline that began on April 29 from 5154.25 continues. Elliott Wave Theory sees it as a C wave, the final subwave within the 4th-wave downward correction that began on April 23.

The correction has taken the form of a Flat, and within that pattern, the C wave typically is at least as long as the preceding A wave and often as much as 1.65 times that size. Wave A covered 106.50 points, if typical, the present wave C, which began from 5154.25, will at a minimum reach around 5048, and could go as low as around 4979.

The C wave breached the upper boundary overnight. I’ve marked the upper and lower boundaries of the target range on the chart with red dashed lines.

The end of wave C will also be the end of the 4th wave correction and the beginning of a 5th-wave uptrend. Fifth waves are somewhat inconsistent. Sometimes that fail to move beyond the end of the preceding 3rd wave — 5128.75 in this case — and sometimes that extend in a lengthy rise that moves far higher. There’s no way to tell in advance what sort of 5th wave the next one will be.

The waves under discussion, as they appear on the chart, with subscripts in curly brackets indicating how far each wave is in degrees from Intermediate degree within the complex fractal structure of the chart: Wave C{-8} is underway within wave 4{-7}, a downward correction. The target range is in comparison to wave A{-8}. Wave 4{-7} will be followed by an uptrend, wave 5{-7}.

What are the alternatives? None at present. They will develop, as they always do in Elliott Wave Analysis.

Possibly outdated by the price movement within the session:

[S&P 500 E-mini futures at 9:35 a.m., hourly bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate Degree that began in December 2018.
• It is in its final subwave, wave 5{-1}
• Within wave 5{-1}, rising waves 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Uptrending wave 5{-5} is in its initial subwave, rising wave 1{-6}, which is in a declining subwave, wave 4{-7}.
• Either wave 4{-7} is in its final subwave, wave C{-8} (the morning chart)
• Or, based on the afternoon chart, wave 5{-7} is in its initial subwave, wave 1{-8}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, May 1, 2024

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures fell during the session, so far reaching into the 5080s. In my mind, the decline is sufficient to justify labeling the April 29 peak, 5154.25, as the end of the B wave within the 4th-wave downward correction that began on April 23, and the beginning of the final subwave, wave C.

If the price reverses and moves above 5154.25, then my analysis doesn’t match the chart and wave B is still underway.

The further the price falls, the more likely it is that my analysis does match the chart, which I have udpated.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures traded narrowly in the 5130s and 5140s overnight, dropping sharply into the 5120s as the closing bell approached. The drop coincided with the release of the Employment Cost Index for the 1st quarter.

What does it mean? Elliott Wave Theory sees the narrow trading range, Wave B, the middle subwave in a downward correction that began on April 23, as typical of a wave reaching its end. The B wave has retraced 124% of the preceding A wave. In a correction forming the Flat pattern, the B wave tends to correct somewhere between 100% and 169% of the preceding A wave. The B wave is within that retracement range.

When the B wave is complete, a declining C wave will begin, the final wave of the downward correction. When wave C is complete, along with wave 4, a 5th-wave uptrend will begin.

On the chart, the waves have a number followed by a subscript in curly brackets showing the wave’s distance from the Intermediate degree in the fractal structure of the price movements. The Intermediate wave is wave 5{0}, which began in December 2018.

Here is how the waves discussed above appear on the chart, small34 to larger: Wave B{-8} is underway within the correction, wave 4{-7}. The preceding A wave is wave A{-8} on the chart. Wave C{-8} will follow, and when it is complete, it will be the end of wave 4{-7} and start of wave 5{-7}.

What are the alternatives? The principal analysis, described above, depends upon the 4th-wave correction taking the form of a Flat. But the A-wave is a bit messy and can be counted, if I squint, as the first wave of a Zigzag, which would mean that the outsized retracement violates a rule of Elliott Wave Theory. If that were the case, then I would count the April 25 low as the end of wave 4 and the subsequent rise as the early portion of wave 5.

[S&P 500 E-mini futures at 3:30 p.m., hourly bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

[Last item updated for the closing bell post.]

• Rising wave 5{0} is underway. It is a wave of Intermediate Degree that began in December 2018.
• It is in its final subwave, wave 5{-1}
• Within wave 5{-1}, rising waves 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Uptrending wave 5{-5} is in its initial subwave, rising wave 1{-6}, which is in a declining subwave, wave 4{-7}.
• Wave 4{-7} is in its final subwave, wave C{-8}

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, April 30, 2024

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.