Live: Friday, July 17, 2020

10:10 a.m. New York time

What’s happening now? The S&P 500 E-mini futures are midway through an uptrending part of an upward correction.

What does it mean? There is a still  more upside left to the correction, although not a lot. The present near-term upward movement will be followed by a small decline and then a final push to the upside. Afterward, either the correction will be complete and the price will begin a major decline, or the correction will extend, perhaps for another month.

Screen Shot 2020-07-17 at 7.00.05 AM
S&P 500 E-mini futures, 2-hour bars

What does Elliott wave theory say? The peak of July 15 marks the end of Minor wave 3 within Intermediate wave C, all with the Primary wave 2 upward correction. Intermediate C requires two more waves for completion: Minor 4 down and Minor 5 up.

Primary 2 is in the second section of a complex correction, composed so far of two zigzags. It could go for a third section — a zigzag or a flat, perhaps — separated from the prior section by an X wave. In that case there will be more upside, although under the present count covering the entire decline since February 19, it cannot exceed 3397.50, the start of Primary wave 1 on that date.

What is the alternative? The end of Minor wave C could mark the end of the Primary wave 2 correction. It would be followed by Primary 3, a downward move of great energy down to the 2000s.

What about my trades? I’m holding back from entering new positions, shares or options, at this point.

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, July 17, 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