Trader’s Notebook

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 exceeded Monday’s high, 4147.25, reaching into the 4160s. I count that rise as the final leg of the third segment of the upward corrective pattern that began on July 14. The present wave is 5{-14} within wave C{-13} within wave 4{-12}. Chart updated.

2:05 p.m. New York time

AMD earnings play exit. I’ve exited my short bull put options spread on AMD for 33.9% of maximum potential loss and have updated the trade analysis with full results.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose slightly in overnight trading, fluctuating between the mid-4090s and the mid-4120s.

What does it mean? An upward correction that began July 14 is in its final stages. The rise that began overnight is likely to carry the price above the August 1 high, 4147.25. Afterward, the downtrend that began on June 8 will carry the price back down to the 3700s and below.

What is the alternative? Some corrections form a compound structure, linking several corrective patterns together. If that happens, then the present corrective pattern will be followed by a connecting wave and then a second corrective pattern, delaying resumption of the downtrend.

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

What does Elliott wave theory say? Within the upward correction, wave 4{-12}, the final leg, wave C{-13}, is underway. Internally, wave C{-13} is in its final wave, 5{-14}. When complete, the downtrend will resume with wave 5{-15}.

If the alternative analysis plays out, wave C{-13} will be followed by a connecting wave X{-13} and then a second corrective pattern within wave 4{-12}.

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)
  • 5{-9} Bitsy, 5/30/2022, 4202.25 (down)
  • 3{-10} Subbitsy, 6/2/2022, 4189 (down)
  • 5{-11} Deci, 6/8/2022, 4164 (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, August 3, 2022

Disclaimer

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.

License
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

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