Tuesday, April 13, 2021

3:30 p.m. New York time

Half an hour before the opening bell. The S&P 500 rose to new highs during the day, so far reaching 4139.75 on the futures and 4148 on the index as wave 5 of Minuscule degree continues its upward course. Chart updated.

10:20 a.m. New York time

What’s happening now? Same song, different verse. The S&P 500 E-mini futures continued their rise, reaching a high of 4127 before the opening bell.

What does it mean? The the rise that began April 7 is continuing, with no hard target to the upside. It will be followed by a shallow correction of the larger rise that began March 25, and then a final push upward.

What are the alternatives? Today’s high could be the end of the rise from April 7, although I think that is the less likely possibility.

[S&P 500 E-mini futures at 3:30 p.m., 90-minute bars, with volume]

What does Elliott wave theory say? April 7 marked the beginning of wave 5 of Minuscule degree within wave 3 of Subminuettte degree. The correction that will follow completion of Subminuette 3 will be wave 4 of Subminuette degree, and like most 4th waves, it will have a sideways quality to its; most likely it will be composed of a Flat structure rather than a Zigzag. Although, it could combines both in a compound correction. This is all happening within the parent, wave 3 of Micro degree, which began on March 4.

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, April 13, 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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