Trader’s Notebook

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures peaked at 3994 before the opening bell, fell to to the 3940s, and then rose slightly. The movements were subwaves of the next-to-the-last wave within the larger final wave of an upward correction that began on October 13.

In Elliott wave terminology: The movements were subwaves of downward wave D{-9} within rising wave C{-8}, the final wave within wave 2{-7}, the upward correction that began on October 13.

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, returning from the session low, 3912.50, to the 3990s, while remaining below the November 15 high, 4050.75.

What does it mean? Two alternatives of nearly equal likelihood. As principal analysis for the chart, I’ve chosen to treat the rise as an upward correction within the downward wave that began on November 15. That downward wave is the next-to-the-last wave within an upward correction that began on October 13.

What is the alternative? The alternative is to consider Thursday’s session low to be the end of the decline from November 15 and the beginning of the final subwave within the third and probably final wave of the upward correction.

If the price remains below the November 15 high, 4050.75, and reverses to the downside, then the principal scenario gains credence. If the price moves above 4050.75 and keeps rising, then the alternative scenario is more likely.

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

What does Elliott wave theory say? The upward correction that began on October 13 is wave 2{-7}.

Under the principal scenario, downward wave D{-8} within the correction is underway, havng begun on November 15 from 4050.75. Under the alternative, wave D{-8} ended at Thursday’s session low, 3912.50, and rising wave E{-8} began.

Wave 2{-7} is a subwave of downtrending wave 3{-6}, which began on August 16 from 4327.50 and which is nested within a series of downward waves of increasing size, stretching up wave 4{-1}, which began on January 4 from 4818.62 on the index.

Enclosing them all is wave 5{0}, an expanding Diagonal Triangle that began on December 26, 2018, from 2346.58 on the index. Wave 4{-1} is the next-to-the-last wave within the Triangle. It will be followed by a powerful push to the upside, wave 5{-1}, which will complete the Triangle and mark the start of a major decline.

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)
  • C{-8} Subminuscule, 11/3/2022, 3704.25 (up)

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 18, 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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