SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures declined sharply from the overnight peak, 4348, and the index decline from its high at the start of the session, 4356.46. The drop is the largest to occur since the uptrend began on June 20.

My new principle analysis places the end of wave 3 of Minuscule degree at the high, and the subsequent decline during the day as wave A of Subminuscule degree within wave 4 of Minuscule degree.

If the rise that followed today’s decline rises above the peak, then this morning’s analysis, stated below, was correct and wave 3 of Minuscule degree is still rising. If today’s rise following the decline reverses into a new decline decline before reaching the peak, then my present principle analysis, stated above, is correct.

[S&P 500 E-mini futures at 3:30 p.m., 40-minute bars, with volume]

9:45 a.m. New York time

What’s happening now? The S&P 500 E-mini futures pushed to a higher high, 4348, in overnight trading and then retreated by a few points. The S&P 500 index at the opening bell gapped to high of 4356.46, slightly above its high of July 2.

What does it mean? The uptrend that began on June 20 continues its final leg. When it is complete, the price will begin a significant move to the downside.

What’s the alternative? The question at this point is whether a new high marks the end of the rise. At this point, I think, the uptrend has a bit longer to run, for reasons I discuss in the Elliott wave theory section below.

[S&P 500 E-mini futures at 9:43 a.m., 40-minute bars, with volume]

What does Elliott wave theory say? As wave of 5 of Submicro degree lengthened, it became clear that the count within that wave needed revision. Submicro 5 began on June 30. I had labelled the high of July 1 as the end of wave 3. I’ve now labelled that high as the end of wave 1, with the low that same day as the end of wave 2, and a lengthening wave 3 still underway, all at Minuscule degree. What comes next within within Submicro 5 will be a sideways correction after Minuscule 3 is complete, and then a final upward push as Minuscule 5 completes its parent wave.

The end of wave 5 of Minuscule degree will also mark the end of 5th waves up to Minute degree, five degrees higher, and also the end of the wave above Minute degree, wave 3 of Minor degree.

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, July 6, 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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