3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures rose during the session to 4149.50, which 59 points below beginning of the decline that began on February 2 from 4208.50. The analysis from this morning is unchanged: Downward wave D{-10} is underway. It is a subwave of rising waves C{-9} within C{-8} within the upward correction that began on October 13, 2022, wave 2{-7}.

However, the higher the price rises, the likelier it becomes that the wave D{-10} decline has ended. A price move above 4208.50 would confirm that the upward wave E{-10} has begun, and it may have begun already on February 10 at 4060.75.

When E{-10} is complete, it will also mark the end of waves C{-9}, C{-8} and the upward correction, 2{-7}. A downtrend, wave 3{-7}, will follow, bringing the pricer below the start of the correction, 3502, and almost certainly significantly below that level. Third waves almost always pack a lot of directional power, and given the uneasiness evident in the markets, wave 3{-7} seems unlikely to be an exception.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose after trading resumed overnight, from the 4070s to a high of 4115, and then pulled back a little.

What does it mean? Today’s principal analysis is unchanged from Friday’s: The upward correction that began on October 13, 2022 is still in progress and internally is in its final rise.

What is the alternative? The upward correction ended at the February 2 high, 4208.50, and the largely declining price movements since have been the first tentative steps a downtrend that will reach 3502 and likely much lower.

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

What does Elliott wave theory say?

These are the waves that are the basis of the analyses.

Principal analysis:

• The upward correction, wave 2{-7}, continues.
• It is in the third of three parts, upward wave C{-8}…
• … which in turn is in its third and final subwave, rising wave C{-9}.
• Wave C{-9} has five subwaves and is in the fourth, declining wave D{-10}.
• Wave D{10} will be followed by rising wave E{-10}
• A wave in wave E{-10}’s position normally will exceed the endpoint of the prior upward wave, 4208.50, which is wave C{-10}. That peak was attained on February 2.
• The end of the wave E{-10} will also be the end of waves C{-9}, C{-8} and of the upward correction, wave 2{-7}.
• Wave 3{-7} will follow, a powerful downtrend that will carry the price below the starting point of the correction, 3502, and most likely significantly below that level.

Alternativ:

• The upward correction, wave 2{-7}, ended on February 2 at 4208.50 and downtrending wave 3{-7} is now underway.

All analyses:

• This is all happening within wave 3{-6}, which began on August 16, 2022.
• Wave 3{-6} is encompassed by a series of larger waves, the smaller within the larger, stretching up five degrees to wave 4{-1}, which began on January 4, 2022.
• Wave 4{-1} is the next-to-the-last wave within a large expanding Diagonal Triangle, wave 5{0}, 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)
• S&P 500 Futures and index:
• 4{-1} Minor, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 1{-2} Minute, 1/4/2022, 4808.25 (down)
• 1{-3} Minuette, 1/4/2022, 4808.25 (down)
• 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)

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, February 13, 2023

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.