SP500 Analysis

3:30 p.m.

Half an hour before the closing bell. The highs so far in the resumed uptrend are 4422.50 on the futures, 4429.97 on the index. I’ve updated the chart, indicating which labels have changed from this morning’s analysis.

11:30 a.m.

New high. So much for intuition. The S&P 500 moved above last Friday’s high, to 4421.75 on the futures, 4429.27 on the index. So my the alternative analysis proves to be the right one. The July 27 low is the end of wave 4 of Minuscule degree, and the subsequent price movement is wave 5 of Minuscule degree. More to come in my afternoon wrap.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose slightly in overnight trading, remaining below the July 26 high.

What does it mean? The lack of directional enthusiasm suggests to me that the correction that began on July 26 is still underway. This was yesterday’s alternative analysis, and I’ve promoted it to the principle analysis today.

What’s the alternative? Under this count, the correction ended at yesterday’s low, 4364.75, and the subsequent rise is a resumption of the uptrend and will soon produce new highs.

[S&P 500 E-mini futures at 3:31 p.m., 30-minute bars, with volume]

What does Elliott wave theory say? Under the principle analysis, yesterday’s low, 4364.75, marked the end of wave A of Subminuscule degree within wave 4 of Minuscule degree within wave 5 of Submicro degree, which began on July 19 from 4224.

Under the alternative analysis, yesterday’s low marked the end of wave 4 of Minuscule degree.

Elliott wave analysis has an intuitive aspect, a right “look and feel”. The resumption of an uptrend looks very directional, like a line on the chart. The rise from Friday is very different, like a scribble by a bored child, with no clear sense of direction. That intuitive reasoning is why I’ve concluded that the 4th wave correction is still underway.

A move above the July 26 high, 4416.75, will confirm the alternative count as correct. While the price remains below that level, the principle analysis appears to be the most likely.

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 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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