Live: Wednesday, July 8, 2020

10:10 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continue to dither 20 points or so below the channel that began on February 19.

What does it mean? I’ll keep it brief, since it is well covered ground: Topping behavior, a smaller scale decline ahead,  followed by a smaller scale upward correction and then a significant decline.

Screen Shot 2020-07-08 at 6.55.03 AM
S&P 500 E-mini futures, 1-hour bars

What does Elliott wave theory say? Minor wave 3 to the downside began July 6. It is a subwave within Intermediate wave 1, which in turn is a subwave of Primary wave 3. It is Primary 3 that will provide the bulk of the coming decline, carrying prices down to the low 2000s or lower.

What is the alternative?  The price pushes above the July 6 high 3184, extending Minor wave 2 still higher. The wave under the rules of Elliott wav analysis cannot exceed 3231.25, the peak of Primary wave 2.

Learning and other resources. The market’s pause before making a decisive move frees up time to review my favorite subject. Here’s a selection from my book shelf.

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, July 7, 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.

Creative Commons 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