SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 has risen during the session, reaching above the October 7 high, to 4430.25 so far, in a movement that lends credence to my principal analysis: Wave 3 of Subminuscule degree within wave 5 of Minuscule degree is underway, in an Elliott wave pattern that will eventually carry the price above the September 3 peak, 4549.50, which marked the end of wave 3 of Micro degree.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to rise overnight, coming within one point of 4400.

What does it mean? The rise is an energetic middle leg of the rise that began on October 12 following a correction within the larger rise that began on October 1.

What’s the alternative? The correction that began October 7 is still underway and the present rise will connect two corrective patterns in a compound structure.

[S&P 500 E-mini futures at 3:30 p.m., 90-minute bars, with volume]

What does Elliott wave theory say? Under the principal scenario, the overnight rise is wave 3 of Subminuscule degree within wave 5 of Minuscule degree within wave 1 of Submicro degree within a series of 5th waves of increasing degree, from Micro up to Minute, all within wave 3 of Minor degree, which began on February 23 with the end of the early pandemic crash. This scenario requires the price in the next month or so to work its way above the September 3 high, 4549.50, which was the endpoint of wave 3 of Micro degree.

Under the alternative scenario, the rise will stop short of the October 7 high, 4420.50, and will begin tracing a second corrective pattern within a compound correction, wave 4 of Subminuette degree.

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 14, 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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