SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 has continued its rise throughout the day, reaching highs of 4485.75 on the futures, 4489.88 on the index. No change to the recount analysis posted at noon. I’ve updated the upper chart.

1:35 p.m. New York time

My trades. I’ve exited my AMD options position for a wash and updated the entry analysis with my reasoning for doing so.

12 noon New York time

A new high forces a recount. My alternative analysis proved to be the path the market took this morning, as the price pushed to new highs, so far reaching 4482.25 on the futures and 4486.08 on the index. The new highs mean that the decline from August 16 was a correction within an ongoing uptrend, wave 3 of Micro degree.

The new count: The August 16 high was the peak of wave 3 of Subminuscule degree, the decline to August 19 was Subminuscule wave 4, and the ensuing rise from that low, which is now underway, is wave 5 of Subminuscule degree. All of this is happening within, in ascending order, wave 5 of Minuscule degree within wave 5 of Submicro degree within wave 3 of Micro degree.

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

9:40 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to rise after trading resumed Sunday afternoon, reaching a high of 4455 shortly before midnight and then moved higher after the opening bell, reaching above 4460.

What does it mean? Under my principal analysis, an upward correction of the decline that ended August 19 is now underway. It is occurring within a larger downward correction that began from the August 16 peak of 4476.50.

What’s the alternative? If the present rise exceeds the August 16 peak, then the long rise that began on February 23, 2020 from 2191.86 on the index is still underway and the decline after August 16 was a downward correction within that large-scale uptrend.

[Outdated analysis: S&P 500 E-mini futures at 9:30 a.m., 30-minute bars, with volume]

What does Elliott wave theory say? Under my principal analysis, the August 16-19 decline is wave 1 of Subminuscule degree and the subsequent rise is Subminuscule wave 2, within in ascending order wave 1 of MInuscule degree within wave A of Submicro within wave 4 of Micro degree, a downward correction of the MIcro-degree rise that began on May 11.

Under the alternative analysis, which is triggered if the price exceeds 4476.50 on the futures and 4480.26 on the index, wave 3 of Micro degree is still underway and the fall from August 16 is a correction within that wave.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, we can judge that similarity of structure only after the fact.

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

By Tim Bovee, Portland, Oregon, August 23, 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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