2:55 p.m. New York time

Some stats of Primary waves 1 and 2 within Cycle wave 1, and their Intermediate wave components. And a broad view chart.

• Primary degree
  • Wave 1, down 1,223.50, or -36.0
    • Intermediate degree
      • Wave 1, down 544.25, or -16.0%
      • Wave 2, up 283.75, or 9.9%
      • Wave 3, down 730.75, or -23.3%
      • Wave 4, up 439.75, or 18.3%
      • Wave 5, down 148.75, or -5.5%
  • Wave 2, up 672.00, or 30.9%
    • Intermediate degree
      • Wave A, up 672.00, or 30.9%
      • Wave B, down 209.75, or -8.0%
      • Wave C, up 421.25, or 17.4%

The red line shows the end of wave 1 of the Minute degree. When the price moves below that level, it will confirm that we are indeed in Primary wave 3.

10:30 a.m. New York time

What’s happening now? The S&P 500 fell below its lower channel line in a five-wave move that appears to be ending with a triangle pattern.

What does it mean? It appears that a significant decline has resumed after an upward correction that lasted a bit more than a month.

What does Elliott wave theory say? By my count, primary wave 2 to the upside ended yesterday at 2846. The decline that followed breaks into five waves, the final one being a 5th wave triangle. I place that initial decline as being at the Minor degree, although that labelling could change as I gain greater knowledge of the unfolding structure.

The 1st wave decline is fairly tentative, as 1st waves often are. There has been no significant increase in volume nor a price gap.

The initial decline will be followed by a retreat upward, the 2nd wave of Minor degree, and after the 2nd will come a 3rd wave most likely longer than the 1st wave, all part of the initial building blocks of the larger degree declines.

What is the alternative? Wave 4 of Primary degree might still be unfolding. A decline beyond the end of wave 1, at 2680.50, would invalidate this alternative. As of this moment the index futures are trading at 2759.00.

What about my trades? Unchanged. I’m continuing to hold my three short bear call options spreads on SPY: Lots 12, 13 and 14, all expiring May 15. (The lot numbers link to the entry analyses.)

By Tim Bovee, Portland, Oregon, April 15, 2020

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.