SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 E-mini futures, having risen to a new high in wave 5 of Subbitsy degree, dropped to below the take-off point of that 5th wave, opening the possibility that wave 5 is developing into a triangle structure. Here are the numbers that lie behind that suggestion:

–April 27, low point of a sideways Subbitsy wave 4, at 4166.75.

–April 28, end of Subbitsy 4 and beginning of Subbitsy 5, at 4172.75

–April 29, high so far of Subbitsy 5, at 4211

–April 29, the price drops to 4168, below the beginning of the 1st wave within Subbitsy wave 5.

That final drop, below the end Subbitsy 4 and the beginning of Subbitsy 5, is consistent with the beginning of a triangle. On the other hand, the final drop is above the low point of Subbitsy 4, so there’s ambiguity.

Alternatively, 4211 could be the end of Subbitsy 5, and the drop from the level could be the early stages of wave 1 within a wave 4 of Subminuscule degree.

We’ll see which analysis wins out as wave 5 develops. I’ve updated the chart, with the numbering based on an analysis that Subbitsy wave 5 is still underway.

10 a.m. New York time

Note the new naming convention for the S&P 500 analyses that are the backbone of Private Trader. “SP500 Analysis” for the S&P 500 and its derivatives. Other analyses will also have the name or symbol of the product being analyzed, e.g., “Bitcoin Analysis” or “TSLA Analysis”. Analyses for a trade will be replace “Analysis” with “Trade”, as in “NIO Trade”.

What’s happening now? The S&P 500 E-mini futures rose sharply in overnight trading, to 4211 (4218.78 on the index). It is the final leg of the rise that began April 22 from 4115.25.

What does it mean? The late April rise is nearing completion and will be followed by shallow correction and then a further rise.

[S&P 500 E-mini futures at 3:30 p.m., 50-minute bars, with volume]

What does Elliott wave theory say? The overnight rise is wave 5 of Subbitsy degree within wave 5 of Bitsy degree within wave 3 of Subminuscule degree. There is no limit to how high a 5th wave can go, beyond the tendency to be proportional to the degree of which it is a part. Subminuscule wave 3 began on April 9 from 4081 and in 20 days has covered 130 points. A 4th wave correction of Subminuscule degree, if it takes the form of a Flat, which is usually, tends to have an end point within the 4th wave of Bitsy degree — one degree smaller — within the preceding Subminuscule 3rd wave. The would give us a correction target between 4115.25 and 4183.50. The further rise after Subminuscule wave 4 will be wave 5 of Subminuscule degree, which could carry the price a good distance higher.

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 29, 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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Based on a work at www.timbovee.com.