SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 E-mini futures peaked at 4389 and reversed in rapid downturn. The peak on the index was 4382.55. The peak ended the 4th wave within wave C of Submicro degree and began the downward movement of a 5th and final wave, whose completion will either end the larger wave 4 of Micro degree correction or begin a second corrective pattern that will extend the correction. I’ve updated the chart.

2:15 p.m. New York time

Another new options position. I’ve entered a long put position on XLY following a sell signal from the Fisher Transform and have posted the analysis.

1:05 p.m. New York time

New options position. I’ve entered a long call position on GLD based on a buy signal from the Fisher Transform and have posted the analysis.

11:45 a.m. New York time

New trading rules. In a break with my usual strategic complexity, I’ve drawn up some trading rules for the simplest of trades: Buying long calls and puts.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to stairstep upward overnight.

What does it mean? The penultimate leg within the final leg of the downward correction that began September 3 is underway. When the present rise is complete, the price will resume its decline, possibly to new lows, which will be followed by a resumption of the uptrend that began on February 23, 2020, reaching to new highs.

What’s the alternative? When the present corrective pattern is complete, it might be followed by a second corrective pattern, delaying the start of the uptrend.

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

What does Elliott wave theory say? The present wave is a rising 4th wave of Minuscule degree within a declining C wave of Submicro degree within a declining wave 4 of Micro degree, which began on September 3. When the 4th wave correction is complete, it will be followed by wave 5 of Micro degree, a continuation of wave 2 of Minor degree, which began in February 2020.

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, September 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.

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