SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 continued to rise throughout the trading session, reaching a high of 4511.50 so far. No change in the analysis. I’ve updated the chart.

1 p.m. New York time

My trading. I’ve exited my bull put options spread position on SPY for a profit and have updated the analysis with details.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to rise overnight, reaching 4504.50 before the opening bell.

What does it mean? The rise that began yesterday is the final leg of a rise that began October 13, which in turn is the middle leg of a rise that began October 12. That middle leg will be followed by a decline that may carry the price back down to the low 4300s. Long story short: More rising prices in the S&P 500’s near future, punctuated by at least one correction that will startle the market..

What’s the alternative? None at the moment. The chart is quite clear. Which isn’t to say ambiguities won’t develop during today’s trading.

[S&P 500 E-mini futures at 3:30 p.m., 180-minute bars, with volume]

What does Elliott wave theory say? The present line-up, small to large, is wave 5 of Bitsy degree within wave 3 of Subminuscule degree within wave 5 of Minuscule degree withing wave 1 of Submicro degree. Subminuscule 3 will be followed by a shallow correction and then a rise to new heights that will complete the parent, Minuscule wave 5, and the grand-parent, Submicro wave 1.

The ensuing Submicro 2, as is typical of second waves, will likely retrace a large portion of the rise from October 1, sending a wave of fear through the markets, and will be followed by an energetic 3rd wave to the upside, a shallow 4th-wave downward correction, and a final 5th wave push upward that will complete 5th waves at four levels, from Micro to Minute, which in turn will complete wave 3 of Minor degree within wave 5 of Intermediate degree, which began on December 26, 2018.

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 19, 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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