SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 rose slightly early in the session and then settled into a very narrow range, less than 5 points wide on the futures for most of the day. 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 in overnight trading, reach 4656.75 at the opening bell.

What does it mean? The rise is the final portion of an upward correction and will be followed by a decline that likely will reach below the correction’s starting point, 4497.57, as the larger downtrend resumes.

What’s the alternative? If the correction develops into a compound structure, the end of the present wife will be followed by a decline and rise that likely will remain above the correction’s starting point, and then a second corrective pattern. In some cases compound corrections will link together three corrective patterns.

[S&P 500 E-mini futures at 3:30 p.m., 40-minute bars, with volume]

What does Elliott wave theory say? The present rise is, from smaller to larger, wave C of Subdeci degree within uptrending wave 4 of Deci degree within downtrending wave wave A of Subbitsy degree within downtrending wave 4 of Subminuscule degree, which began its descent from the November 22 high of 4740.50.

Under the principal analysis, Subdeci wave C will end its parent 4th wave and will be followed by downtrending wave 5 of Deci degree. The 5th wave, when complete, will mark the end of Subbitsy wave A.

Under the alternative analysis, wave C will be followed by an X wave — down and then up again — and then by a second corrective pattern.

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, in the ever-changing markets, 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, December 7, 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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