Trader’s Notebook

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 continued to rise to the session, reaching the high 3700s on the futures. Wave C{-12} continues its upward course, within an upward correction, wave 4{-11}. 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, returning to the mid-3700s.

What does it mean? The final leg of an upward correction that began on June 14 has begun.

What are the alternatives? But where should the correction’s inner structure be placed in regard to the correction itself? I’ve labeled the inner structure as one size below the correction. It may be smaller. More on this in the Elliott wave theory section, below.

[S&P 500 E-mini futures at 3:30 p.m., 160-minute bars, with volume]

What does Elliott wave theory say? Under the principal analysis, the June 17 low, 3639, marked the end of downward wave B{-12} within an upward correction, wave 4{-11}. Rising wave C{-12} is now underway.

The wave 4{-11} correction is taking the form of a Flat — three interior waves, with A having three subwaves; B, three subwaves; and C, five subwaves (3-3-5). In a Flat, C waves tend to be 100% to 165% as long as the preceding A wave. Wave A{-12} was 134.50 points long, and so the price target for wave C{-12} is between 134.50 points and 221.93 points above the C wave starting point, 3639. This gives a price target range of 3773.50 to 3860.93.

I’ve marked the lower and upper price target limits on the chart with dashed lines.

Under the alternative analysis, wave C{-12} is relabeled as wave C{-13}, the 3rd and final wave within wave A{-12}, which began on June 14. Basically, this pushes the the A-B-C pattern of the principal analysis one degree lower.

Wave 4{-11} is the next-to-the-last wave within downtrending wave 3{-10}, which began on June 2 from 4169. When complete, wave 5{-11} will carry the price down further, perhaps to a significant degree.

Wave 3{-10} is a subwave of wave 3{-9}, which began on May 4, within wave 5{-8}, which began on April 21 from 4509, within wave 5{-7}, which began on March 29 from 4631, within wave 1{-6}, the initial wave of a large downtrend that began on January 4 from 4808.25.

We Are Here.

These are the waves currently in progress under my principal analysis. Each line on the list shows the wave number, with the subscript in curly brackets, the traditional degree name, the starting date, the starting price of the S&P 500 E-mini futures, and the direction of the wave.

  • S&P 500 Index:
  • 5{+3} Supercycle, 7/8/1932, 4.40 (up)
  • 5{+2} Cycle, 12/9/1974, 60.96 (up)
  • 5{+1} Primary, 3/6/2009, 666.79 (up)
  • 5{0} Intermediate, 12/26/2018, 2346.58 (up)
  • 4{-1} Minor, 1/4/2022 4818.62 (down)
  • 1{-2} Minute, 1/4/2022 4818.62 (down)
  • S&P 500 Futures and index:
  • 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
  • S&P 500 Futures:
  • 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
  • 1{-5} Micro, 1/4/2022, 4808.25 (down)
  • 1{-6} Submicro, 1/4/2022, 4808.25 (down)
  • 5{-7} Minuscule, 3/29/2022, 4631 (down)
  • 5{-8} Subminuscule, 4/21/2022, 4509, (down)

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, June 21, 2022


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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