Live: Tuesday, June 16, 2020

10:10 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continue rising, nearing the 78.6% Fibonacci retracement point. Since the upward correction began on June 15, only yesterday, the price has risen by 8%, to a correction peak so far of 3156.25

What does it mean? Soon, perhaps today, the price will reverse to the downside, the next step in the upward correction, and then will again rise to set a new high within the upward correction, while staying below 3231.25, the price from which the downtrend began.

Screen Shot 2020-06-16 at 7.08.03 AM
S&P 500 E-mini futures, 30-minute bars


What does Elliott wave theory say? The S&P 500 is within the 5th subwave of a Minor wave A, the first wave of what is probably going to turn out to be a zigzag pattern. The next step will be three subwaves down, the Minor B wave, to be followed by a 5-wave movement up, the Minor C wave, which in all likelihood will complete Intermediate wave 2 within Primary wave 3. Following Intermediate 2 comes Intermediate wave 3, which will carry the price down to new lows since the June 8 peak.



What is the alternative? A move above 3231.25 would for a rethinking of the count since June 8, when Primary wave 3 began.

What about my trades? I’m out of options and am staying out for now, as I wait for Intermediate wave 3 to begin. I’m holding on to my SDS shares, which move the opposite of the S&P 500, as I wait for the last stages of Intermediate wave 3.

Learning and other resources. Elliott Wave International has long been the leading analytical house based on Elliott wave theory. They make available a number of free educational materials and other resources, in addition to their for-pay subscriptions.

I recommend two books, both by people associated with EWI.

First, Elliott Wave Principle by Robert Prechter and A.J. Frost is the book that, along with Prechter’s analyses, that created the revival of Elliott wave theory. I first read it in 1984, and it has had a profound influenced on my thinking about markets ever since.

Second, I’ve found Visual Guide to Elliott Wave Trading by Wayne Gorman and Jeffrey Kennedy, both of EWI, to be a useful book that relates Elliott wave theory to practical trading. The authors are hands-on Elliotticians, and for an active trader, that’s exactly what’s needed — less theory and more how-to. The first chapter of the book gives a very nice thumbnail run down of what Elliott wave theory is all about.

Terminology. Here are some links to information about some of the technical jargon I use.

Charts. On my charts, waves have a subscript showing the degree above or below the Intermediate degree. Here are the subscripts and the degree each represents:

  • {+3} Supercycle
  • {+2} Cycle
  • {+1} Primary
  • No subscript: Intermediate
  • {-1} Minor
  • {-2} Minute
  • {-3} Minuette

By Tim Bovee, Portland, Oregon, June 11, 2020


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.

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