3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 has continued to rise during the session, so far reaching 3950 on the futures. In Elliott wave terminology, rising wave B{-9} is underway, a subwave of declining wave B{-8} within an upward correction, wave 2{-7}. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? After the latest inflation numbers were released, an hour before the opening bell, the S&P 500 E-mini futures shot up by nearly 100 points in a single minute, to 3861, and then continued to rise, coming close to the 50% Fibonacci retracement level in the low 3900s.

What does it mean? The rise suggests that the middle wave within an upward correction that began on October 13 is still in its middle subwave. A final decline will follow, and when it is complete, a larger final wave to the upside will complete the correction.

What is the alternative? This morning’s rapid rise invalidates my late analysis in yesterday’s Trader’s Notebook, which saw decline as ending the middle subwave within the correction’s middle wave. That middle subwave has met all of the requirements for completion, so any higher high in the rise that began this morning could be the end of that subwave. Or not.

[S&P 500 E-mini futures at 3:30 p.m., 230-minute bars, with volume]

What does Elliott wave theory say? The middle subwave is rising wave B{-9}, part of the larger rising middle wave, B{-8}, within wave 2{-7}, the upward correction that began on October. 13. My late analysis yesterday, posted half an hour before the closing bell, saw wave B{-9} as having ended at yesterday’s high, and declining wave C{-9} as having begun. Today’s new high tosses that analysis in the trash. Wave B{-9} is underway, and wave C{-9}, which will complete wave B{-8}, lies in the future.

The flaw in my late analysis yesterday was the lack of a clear three-wave pattern within wave B{-9}. There was a middle subwave of sorts, but it really wasn’t proportional to the parent wave. The overnight decline and subsequent rise provides that clear three-subwave pattern.

Wave 2{-7} is a subwave of downtrendng wave 3{-6}, which began on August 16 and is encompassed by a series of increasingly larger downtrending 1st waves that began on January 4, all part of downward wave 4{-1}, the fourth of five waves within an expanding Diagonal Triangle that began on December 26, 2018.

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)
• 3{-6} Submicro, 8/16/2022, 4327.50 (down)
• 2{-7} Minuscule, 10/13/2022, 3502 (up)
• B{-8} Subminuscule, 10/28/2022, 3924.25 (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, November 10, 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

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.