SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 dropped back to the narrow range that has defined its course since Monday afternoon. No change to the analysis. I’ve updated the chart.

9:40 a.m. New York time

What’s happening now? The S&P 500 E-mini futures traded sideways overnight and then. shortly before the opening bell, rose slightly, remaining below yesterday’s high of 4230.

What does it mean? Under my principle analysis, yesterday’s high marked the end of the upward correction that began on May 13, and the beginning of a resumption of the dominant downtrend, which will carry the price down into the low 4000s and below.

What are the alternatives? 1) If the price rises above 4230 then the correction is still underway. 2) If it rises above the May 9 high of 4238.25, then the dominant trend is still up and will carry the price to a series of new highs.

[S&P 500 E-mini futures at 3:30 p.m., 70-minute bars, with volume]

What does Elliott wave theory say? Under my principle analysis, the decline from yesterday’s high is wave 1 within wave 3 of Subitsy degree, which in turn is the middle wave within wave 1 of Bitsy degree. Bitsy wave 1 began on May 9.

Under the first alternative, the Subbitsy wave 2 correction to the upside is still underway, and the present wave is C within Subbitsy 2.

Under the second alternative, wave 5 of Subminuette degree — five degrees above Subbitsy — is still underway. I consider this alternative to be unlikely.

Learning and other resources. See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, June 2, 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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