Trader’s Notebook

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures hit the lower price boundary and reversed. If I count the waves within the upward correction that began on December 19, 2022, then that touch would end the 4th wave, with the wave having hit the lower boundary twice. I don’t have a lot of confidence that such a count is correct. Could be, though. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell from its overnight high, 3885.50, into the 3830s.

What does it mean? The upward correction that began on December 19, 2022 continues and is taking the form of a Horizontal Triangle, which is in the fourth of five segments. When the correction is complete, it will be followed by an energetic decline, proportional to the size of the movements relative to the rest of the chart.

What are the alternatives? None at present. I’m sure alternatives will develop, as they always do.

Chart note. The Horizontal Triangle’s price channel is shown on the chart in red. Directional movements, or waves, within a correction are designated by letters, and within a trend, by numbers. Each label is followed by a subscript, in curly brackets, showing each directional movement’s place in the complex hierarchy of the chart, in which larger waves contain smaller waves and are in turn contained by still larger waves, a fractal structure. A wave’s place in the hierarchy is called its “degree”. The larger the subscript, the larger a wave’s degree.

[S&P 500 E-mini futures at 3:30 p.m., 210-minute bars, with volume]

What does Elliott wave theory say? Elliott wave theory says, “More of the same”.

Here are the waves that are guiding the analysis.

  • The upward correction that began on December 19, 2022 is wave 2{-9}.
  • It is a subwave of wave 1{-8}, a downtrending wave that began on December 13.
  • The parent wave of wave 1{-8} is wave 3{-7}, a downtrend that has much energy, like most 3rd waves, and that will carry the price down a signifiant distanced.
  • This is all happening within wave 3{-6}, which began on August 16, 2022…
  • … which in turn is part of wave 1{-5}, which began on January 4, 2022, the starting point of the large bear market that dominated the charts last year and probably will this year.

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)
  • 3{-7} Minuscule, 12/1/2022, 4110 (down)
  • 1{-8} Subminuscule, 12/1/2022, 4110 (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, January 5, 2023


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.

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