Live: Monday, July 27, 2020

10:05 a.m. New York time

Updated to corrected July 23 high to 3284.50.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose by a very small amount when trading resumed Sunday night and fell sharply at the opening bell to 3210.

What does it mean? Uncertain. There has been no clear indicator as of yet that the decline from July 23 is the beginning of a major price drop, nor that it is the first part of a continuation of the correction.

Screen Shot 2020-07-27 at 7.02.08 AM
S&P 500 E-mini futures, 1-hour bars

What does Elliott wave theory say? The labelling on my chart continues to assume that the Primary wave 2 correction is continuing. So far it has been a double Zigzag pattern, and the price is at present in Minor wave 4 within Intermediate wave C.

What is the alternative? A decline below the Minor 2nd wave low of July 9, at 3105.25,  would tilt the analysis in favor of Primary wave 2 having ended on on July 23. A move above the Minor wave 3 high, 3284.50,  on July 23 would til in favor of Primary wave 2 still bing underway.

What about my trades? I’m waiting for Primary wave 2 to end before I resume trading.

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 27, 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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