SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 declined during the day in a pattern consistent with my alternative analysis, which has been promoted to principal analysis status. Yesterday’s high of 4498 was the peak of wave 3 of Bitsy degree, and Wave 4 of Bitsy degree is tracing a counter-trend correction. Here’s a new chart with the revised analysis.

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

9:45 a.m. New York time

What’s happening now? The S&P 500 E-mini futures dipped slightly and then rose in overnight trading, remaining below yesterday’s high, 4498.

What does it mean? The small decline will be followed by new highs in the final leg of the rise that began on August 19.

What’s the alternative? A sideways correction that began on August 23 is still underway, pushing off the rise to new highs until later in the future.

[Outdated: S&P 500 E-mini futures at 9:46 a.m., 30-minute bars, with volume]

What does Elliott wave theory say? It’s hard to choose between the two possible scenarios. I consider them to be of equal likelihood.

Under my principal analysis, wave 5 of Bitsy degree began at yesterday’s low and is presently in a very low-level wave 2 correction internally.

Under my alternative analysis, wave 4 of Bitsy degree is still underway.

See yesterday’s S&P 500 analysis for a detailed discussion of the greater implications of both scenarios.

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 26, 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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