Wednesday, March 17, 2021

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 rose concurrently with today’s announcement by the Federal Open Market Committee. In Elliott wave terms, the rise was a 3rd wave internal to wave 5 of Minuscule degree. Third waves tend to be energetic and are often the longest wave in the direction of a trend. It will be followed by a 4th wave correction and then a 5th wave push to the upside which will compute the parent wave, Minuscule 5. I’ve updated the chart below.

10:15 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continue to work through a very low level correction within the final upward push of a slightly higher level. So far yesterday’s high of 3970.75 stands.

What does it mean? There’s more upside ahead. The rise from March 15 will be followed by by a correction of the rise that began on March 8, from 3816.25.

What are the alternatives? A decline below 3816.25 would mean something beyond a simple correction is going on.

[S&P 500 E-mini futures at 3:30 p.m., 30-minute bars, with volume]

What does Elliott wave theory say? The rise from March 15 is wave 5 of Subminuscule degree, and the parent is wave 3 of Minuscule degree which began on March 8. A trend channel for Minuscule degree shows Subminuscule wave 5 has the potential to reach into 4030s or higher, perhaps significantly higher if it extends, or perhaps somewhat lower it truncates.

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
  • {-4} Subminuette
  • {-5} Micro
  • {-6} Submicro
  • {-7} Minuscule
  • {-8} Subminuscule
  • {-9} Bitsy
  • {-10} Subbitsy

By Tim Bovee, Portland, Oregon, March 17, 2021


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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