SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 continued to rise until the midpoint of the trading session and then began a low-scale sideways movement. The pattern lends credence to my principal analysis of this morning: The present wave is the 3rd of Subbitsy degree, and I would consider the new sideways pattern as a 4th wave internal to Subbitsy 3. No change in the analysis. I’ve updated the chart.

9:50 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose to a new high in the minutes before the opening bell.

What does it mean? The low-level uptrend that began August 26 is still underway and is now in the middle portion of its rise. Its completion will be followed by a shallow correction and then a further rise to new heights.

What’s the alternative? It’s possible that the overnight sideways movement was the correction, and the further rise is the final portion of the uptrend from last week. It’s a question of what level we’re counting, and I discuss it further in the Elliott wave theory section, below.

[S&P 500 E-mini futures at 3:30 p.m., 20-minute bars, with volume]

What does Elliott wave theory say? The rise from August 26 is wave 5 of Bitsy degree. It’s completion will signal the end of a series of 5th waves of higher degree, up three levels to Submicro degree. The parent, wave 3 of Micro degree, began May 19 at 4059.50.

How far along is Bitsy wave 5? By my principal count, internally it is in wave 3 of Subbitsy degree, which will be followed by a 4th wave correction and then a 5th wave push to new highs.

But what to make of the sideways movement overnight? I’m treating it as a 4th wave within Subitsy wave 3, a level so low I don’t even have a name for it. Using the subscripts method, Subitsy on the chart is {-10} and the unnamed lower wave is {-11}.

It’s possible, however, that what I’m calling the Subitsy, {-10}, degree is really the nameless {-11}, and the sideways stretch overnight was a degree lower, at {-12}. And that is my alternative analysis. Time will unravel the mystery of which analysis is correct.

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 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.

Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.