SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 pulled back slightly from the overnight peak of 4580.75 on the futures, 4598.53 on the index when the session opened. 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 continued to rise overnight, reaching a peak so far of 4580.75.

What does it mean? The rise that began October 18 is still underway, marking the final leg of the uptrend that began on October 12 within the middle leg of the uptrend that began on October 4.

What’s the alternative? Any peak can mark the uptrend’s completion and the beginning of a downward movement. We’ll never know until the decline has become sufficiently large.

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

What does Elliott wave theory say? The rise from October 18 is wave 5 of Bitsy degree within wave 3 of Subminuscule degree. Under the Elliott rules, there is no limit on how high an impulse wave can go, except for the need to preserve a balance in distance covered and time taken that is appropriate for the degree. Waves at the Subminuscule level tend to be over in days — weeks at most.

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 26, 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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