Live: Tuesday, June 30, 2020

10:45 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continue the early stages of what will become a significant decline.

What does it mean? The movements we’ve seen since June 8 are the gentle opening bars of Wagner’s “Das Rheingold”, and as always, with Wagner and the markets, it will be followed by drama aplenty, in the form of a major decline

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S&P 500 E-mini futures, 2-hour bars

What does Elliott wave theory say? Minor wave 3 within Intermediate wave 1 began June 19. The encompassing degree, Primary wave 3, began June 8, and will carry price The movement of the encompassing degree, Primary wave 3,  will a significant distance toward the 2000 level, from the 3054 price as of this posting.

What is the alternative? It will take a break below 2976.25, the end of Minor wave 1 attained on June 15, for Minor wave 3 to be verified. Without the verification, it is possible that Minor wave 2 is tracing a complex course. I don’t consider this to be likely.



What about my trades? I anticipate no trades today. I’m waiting for Intermediate wave 3 before entering bear call options spreads on SPY. My shares, SDS, make money when the S&P 500 declines. They became unprofitable at the beginning of Primary wave 2 at 2174. So I’ll hold my shares during the ride down to 2000, and then begin trading in and out to catch impulse waves at the Intermediate degree.

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 30, 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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