Monday, August 17, 2020

9:55 a.m. New York time

What’s happening now? The S&P 500 E-mini futures with this session’s high so far, 3381, having reached a level 1.5 points below the August 11 peak, 3382.50.

What does it mean? The price remains below the upper boundary of the price channel, keeping the interpretation that  August 11 was the end of the uptrending correction that began in March and the beginning of the next leg down of a major downtrend that began in February.

S&P 500 E-mini futures, 30-minute bars

What does Elliott wave theory say? The August 11 peak by my count was the end of Primary wave 2. The subsequent three days have been the early, low degree stages of Primary wave 3, which will carry the price 1,000 points or more to the downside.

What is the alternative? The net sideways movement of the last three days could be interpreted as Intermediate wave 4 within Primary 2, meaning that the upward correction may a bit further to go before it’s over.  The tip-off will be the price exceeding the August 11 peak, 3382.50

What about my trades? Holding my bear shares, delaying any options trades until Minor wave 3 within Primary wave 3.

(TDAmeritrade’s ThinkOrSwim app on my MacBook won’t launch for some reason, so the chart, from my iPhone, looks a bit different than usual.)

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, August 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