Wednesday, April 28, 2021

3:15 p.m. New York time

45 minutes before the closing bell. The S&P 500 rose to a new high, 4192.50 on the futures and 4201.53 on the index, meaning that the uptrend that began on April 22 is still underway. In terms of Elliott wave analysis, the rise is wave 5 of Bitsy degree within wave 3 of Subminuscule degee. I’ve updated the chart.

9:45 a.m. New York time

What’s happening now? The S&P 500 remained below yesterday’s peak, 4192.50, in overnight trading.

What does it mean? Two possibilities: Either 4192.50 completes the rise that began April 22 from 4115.25…

What’s the alternative? … or the meandering since yesterday is a correction, with fresh highs yet to come within a few days. It’s impossible to choose between the two. I’ve marked the chart to show the rise is complete, but I have little confidence in that choice.

[S&P 500 E-mini futures at 3:15 p.m., 45-minute bars, with volume]

What does Elliott wave theory say? The rise since April 22 is wave 5 of Bitsy degree. It’s completion will also mark the end of wave 3 of Subminuscule degree, which will be followed by a sideways correction. Subminuscule 3 began on April 8.

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 28, 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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