SP500 Analysis

3:50 p.m. New York time

My trades. I’ve exited my long call position on GLD for a profit and updated the analysis with details.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 fell during the day, reaching within 2 points of yesterday’s low on the futures, and then rose again, so far staying below yesterday’s high, 4365, as wave 5 of Micro degree continues. No change in the analysis. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose slightly in overnight trading while remaining between yesterday’s high and low.

What does it mean? The early stages of the rise from yesterday’s low continues within the larger rise that began October 1. Eventually — probably a month or more from now — the price will exceed the September 3 high of 4549.50. A move above the October 7 high, 4420.50, will strengthen the case for this principal scenario.

What’s the alternative? The downward correction that began October 7 is still underway. A move below the October 12 low of of 4317.25 will strengthen the case for this alternative scenario.

[S&P 500 E-mini futures at 3:30 p.m., 85-minute bars, with volume]

What does Elliott wave theory say? By my principal analysis, uptrending wave 5 of Minuscule degree began on October 12. So far it has been a tentative rise, with an internal rise (wave 1?), decline (wave 2?) and small rise (first step in wave 3 or another step in wave 2?). This is all happening within wave 5 of Micro degree, which began on October 1 and which will eventually work its way above the September 3 high, 4549.50

By my alternative analysis, the rise-decline-rise pattern since October 12 is a continuation of wave 4 of Minuscule degree, meaning the correction that began October 7 is still underway.

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, October 13, 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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