Monday, March 22, 2021

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 continued to rise during the trading session, reaching a high so far of 3944.50. The pattern is consist with both the principle analysis (5th wave of Subminuscule degree) and the alternate analysis (X wave of Bitsy degree). I’ve updated the chart below.

9:40 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continues to tentatively work through the early stages of an uptrend from the March 19 low of 3875.

What does it mean? Under my principle analysis, the rising price will eventually reach above the present high of 3978.50.

What are the alternatives? It’s possible that the correction that began March 11 is still underway, with the present rise being a link with a new corrective pattern. If the alternative proves out, the price will continue to fluctuate within a narrow range.

[S&P 500 E-mini futures at 3:30 p.m., 38-minute bars, with volume]

What does Elliott wave theory say? Under the principle analysis, the rising price is wave 5 of Subminuscule degree. The completion of Subminuscule wave 5 will also mark the end of its parent wave, Minuscule wave 3 and will be followed by a shallow correction.

Under the alternative, it’s an X wave connector of Bitsy degree, which will be followed by a Flat, a ZigZag or a Triangle formation to complete the parent wave 4 of Subminuscle degree.

Practically speaking, the difference between the two analyses is the degree of upward potential now rather than later.

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 22, 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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