SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures dropped nearly 22 points below the high of the day before and then rose, coming to within less than 2 points of that peak. A move above the June 29 high of 4291 on the futures would mean that wave 5 of Micro degree is still underway and rising. As long as the price remains below that level, it is possible, although not certain, that the Micro 5th wave is complete and that the trend is down. I’ve updated the chart below.

9:40 a.m. New York time

What’s happening now? The S&P 500 E-mini futures dawdled overnight below yesterday’s peak, 4291, in overnight trading.

What does it mean? The rise from June 20 has met the requirements for a complete uptrend, and so 4291 could mark the end of that rise, to be followed by a significant movement to the downside.

What’s the alternative? Nothing on the chart precludes the rise from June 20 from extending higher.

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

What does Elliott wave theory say? The rise from June 20 is wave 5 of Micro degree. Internally, I can count the high of June 29 as being the end of the wave, but I see room for one more push to the upside, with the June 29 peak being the end of wave 3 of Submicro degree. There’s a bit of ambiguity on the chart.

The completion of Micro 5 will also mark the completion of three parent 5th waves, up to Minute degree, and above that the completion of wave 3 of Minor degree, setting up a signifiant correction to the downside. Minor wave 3 began more than a year ago, in February 2020, and so I would expect the Minor 4th wave correction to last a comparable length of time — maybe shorter, maybe longer, but still a movement best viewed on a one- or two-year chart.

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 30, 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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