3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures traced a downward movement during the session, from the session high, 4541.25, to a low of 4515, that resembles the first three waves of a five-wave trend. It was followed by an upward movement that fits the pattern of a 4th-wave upward correction.

While both extremes are close to the 61.8% Fibonacci retracement level, the five-wave pattern is a trend and, perhaps, a sign that the price is breaking free from that level and starting the next leg of its journey.

What it means is still up in the air. The trend is of a small degree, taking only a few hours to reach completion. It could be a subwave within the final wave of the upward correction, it could be the start of a connecting wave that will lead to a second corrective pattern within the correction, or the correction may have ended at the peak, 4541.25, and the five waves may be the tentative first steps in what will be a powerful downtrend.

Time will answer the questions. We’re not there yet.

Here is a chart of the futures today showing the waves.

[S&P 500 E-mini futures at 3:25 p.m., 1-minute bars, with volume]

9:35 a.m. New York time

What’s happening now? Overnight, the S&P 500 E-mini futures stayed close to the 61.8% Fibonacci retracement level (in red on the chart), remaining in the 4520s and 45430s, then rose to an overnight 4541.25 peak as an inflation indicator, Personal Income and Outlays, was released, from which it quickly reteated.

What does it mean? The overnight movement left unresolved the two open questions about the chart: First, is the upward corrective pattern that began on August 18 still underway, or has it reached its end? And second, if the corrective pattern has ended, then has the overall correction, a 2nd wave, also ended, or will it be a compound correction, containing two or three corrective patterns?

For the chart, I’ve chosen labels consistent with the upward correction wave 2{-3}, still being underway. But all of the possibilities are of equal likelihood at this point.

What are the alternatives? None at present, beyond the two questions listed above.

[S&P 500 E-mini futures at 9:35 a.m., hourly bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal analysis:

• A downtrend wave 3{-2}, began on July 27 is underway.
• Internally, wave 3{-2} complete its first subwave, wave 1{-3}, on August 18, and wave 2{-3}, an upward correction, began..
• Within wave 2{-3}, rising wave C{-4} is underway.
• Within rising wave C{-4}, rising wave E{-5} is underway.

Big picture:

• Both the wave 2{-2} correction and wave 3{-2} downtrend are subwaves of wave 4{-1}, a downtrend that began on January 4, 2022.
• Wave 4{-1}, in turn, is a subwave of wave 5{0}, an expanding Diagonal Triangle that began on December 26, 2018.
• Wave 4{-1} may eventually reach the lower boundary of wave 5{0}, presently slightly below 1800 and declining further each day.
• Wave 4{-1} will be followed by rising wave 5{-1}, the final wave in the Triangle.

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, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 3{-2} Minute, 7/27/2023, 3502 (down)

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

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 31, 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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures’ upward correction has crashed against the 61.8% Fibonacci retracement level, which rounds to a price of 4526, and remains stuck there, so far bouncing like a ball against a wall, unable to resume its rise.

If the price breaks through, the next Fibonacci resistance level is 78.6%, at a price that rounds to 4574.

If it fails to break through, then the corrective pattern will be complete and the next step will be one of those described this morning, in the “What does it mean?” section, below.

I’ve update the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose into the 4110s overnight, retreated slightly, and then rose higher as the opening bell approached.

What does it mean? The third and final wave of the upward correction that began on August 18 continued, and that final wave is near its end. The final wave has met all of the criteria that are typical of such waves. It is approaching the 61.8% Fibonacci retracement level, a common reversal point. (The Fibonacci retracement ladder is shown on the chart in red.)

Either the end of that wave will also be the end of the upward correction and a powerful downtrend, wave 3{-3}, will begin, or the correction will take a compound form, with the end of the first corrective pattern being followed by a declining connector wave and then a second corrective pattern.

What are the alternatives?

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

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal analysis:

• A downtrend wave 3{-2}, began on July 27 is underway.
• Internally, wave 3{-2} complete its first subwave, wave 1{-3}, on August 18, and wave 2{-3}, an upward correction, began..
• Within wave 2{-3}, rising wave C{-4} is underway.
• Within rising wave C{-4}, rising wave E{-5} is underway.

Big picture:

• Both the wave 2{-2} correction and wave 3{-2} downtrend are subwaves of wave 4{-1}, a downtrend that began on January 4, 2022.
• Wave 4{-1}, in turn, is a subwave of wave 5{0}, an expanding Diagonal Triangle that began on December 26, 2018.
• Wave 4{-1} may eventually reach the lower boundary of wave 5{0}, presently slightly below 1800 and declining further each day.
• Wave 4{-1} will be followed by rising wave 5{-1}, the final wave in the Triangle.

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, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 3{-2} Minute, 7/27/2023, 3502 (down)

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

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 30, 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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures rose sharply during the session, from the 4440s at the open to slightly above 4500 as the closing bell approached.

The rise confirms that the last subwave, wave C{-4}, within the upward correction that began on August 18, wave 2{-3}, is now in its final subwave, wave E{-5}.

The wave C{-4} rise has taken the correction to the 50% Fibonacci retracement level, just above the end point of the preceding A wave, meeting one criterion for the typical behavior of a C wave in this correction.

There are two possibilities for what happens after the end of wave C{-4}: Either the end of that wave will also be the end of the upward correction and a powerful downtrend, wave 3{-3}, will begin, or the correction will take a compound form, with the end of the first corrective pattern being followed by a declining connector wave and then a second corrective pattern.

Also, given the amount of the retracement, I’m abandoning the alternative analysis from this morning and the past few days.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures declined overnight, from a high in the 4450s down into the 4430s.

What does it mean? The final wave of the corrective pattern that began on August 18 is nearings its end. The 4th of five subwaves within t is now underway, a downward correction two degrees smaller than the upward correction that envelopes it.

The 4th wave downward correction will be followed by a final push upward that will complete the larger corrective pattern, and perhaps the correction itself.

The 4th wave is labeled wave D{-5} on the chart, a subwave of wave C{-4} within an upward correction, wave 2{-3}.

The upward push following wave D{-5} will be wave E{-5}. How high can it go? As the final subwave, it will determine the end point of wave C{-4}. C waves tend to move beyond the starting point of the preceding A wave, 4483.50 in this case.

I’ve superimposed the Fibonacci retracement ladder on the chart in red, and a 50% retracement would be fewer than 10 points above that target.

The C wave in a Zigzag correction like wave 2{-3} often is about the same length as the preceding A wave. Wave A{-4} was 133 points long, wave C{-4} began at 4365.25, and so the endpoint under this theory would be 4498.75, which is 6.75 points above the 50% retracement level.

There is nothing in Elliott wave theory that would forbid wave C{-4} from rising higher, to the 61.8% retracement level just above 4625.75, for example. And it could come up short, ending, for example, at the 38.2% retracement level just below 4458.75.

What are the alternatives? It’s possible that the subwaves seen so far within wave 2{-2} are a degree smaller within the fractal structure of the chart. If that is the case, then the waves labeled A{-4}, B{4} and {C-4} are subwaves of wave A{-3}, the first subwave of the correction. [Note: Abandoned in the afternoon analysis. See above.]

[S&P 500 E-mini futures at 3:30 p.m., 55-minute bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal analysis:

• A downtrend wave 3{-2}, began on July 27 is underway.
• Internally, wave 3{-2} complete its first subwave, wave 1{-3}, on August 18, and wave 2{-3}, an upward correction, began..
• Within wave 2{-3}, rising wave C{-4} is underway.
• Within rising wave C{-4}, declining wave D{-5} is underway.

Alternative analysis: [Note: Abandoned in the afternoon analysis. See above.]

• Within wave 2{-3}, rising wave A{-4} is underway and is in its 3rd subwave, wave C{-5}.

Big picture:

• Both the wave 2{-2} correction and wave 3{-2} downtrend are subwaves of wave 4{-1}, a downtrend that began on January 4, 2022.
• Wave 4{-1}, in turn, is a subwave of wave 5{0}, an expanding Diagonal Triangle that began on December 26, 2018.
• Wave 4{-1} may eventually reach the lower boundary of wave 5{0}, presently slightly below 1800 and declining further each day.
• Wave 4{-1} will be followed by rising wave 5{-1}, the final wave in the Triangle.

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, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 3{-2} Minute, 7/27/2023, 3502 (down)

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

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 29, 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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures bounced from the 4420s to the 4440s several times during the session, putting on a good show but going nowhere. The pause is a correction within the rising 3rd subwave within the ongoing upward correction that has been with us since mid-August.

This morning’s analysis stands unchanged. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures traded sideways in the 4410s and 4420s after trading resumed overnight, and as the opening bell approached rose into the 4430s and into the 4440s as the session began.

What does it mean? The final subwave of an upward correction that began on August 18 continues. When it is complete, it will be followed either by the resumption of the downtrend that began on July 27 or by a second corrective pattern in a compound correction.

What are the alternatives? It’s possible that the subwaves seen so far within wave 2{-2} are a degree smaller within the fractal structure of the chart. If that is the case, then the waves labeled A{-4}, B{4} and {C-4} are subwaves of wave A{-3}, the first subwave of the correction.

[S&P 500 E-mini futures at 3:30 p.m., 55-minute bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal analysis:

• A downtrend wave 3{-2}, began on July 27 is underway.
• Internally, wave 3{-2} complete its first subwave, wave 1{-3}, on August 18, and wave 2{-3}, an upward correction, began..
• Within wave 2{-3}, rising wave C{-4} is underway.

Alternative analysis:

• Within wave 2{-3}, rising wave A{-4} is underway and is in its 3rd subwave, wave C{-5}.

Big picture:

• Both the wave 2{-2} correction and wave 3{-2} downtrend are subwaves of wave 4{-1}, a downtrend that began on January 4, 2022.
• Wave 4{-1}, in turn, is a subwave of wave 5{0}, an expanding Diagonal Triangle that began on December 26, 2018.
• Wave 4{-1} may eventually reach the lower boundary of wave 5{0}, presently slightly below 1800 and declining further each day.
• Wave 4{-1} will be followed by rising wave 5{-1}, the final wave in the Triangle.

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, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 3{-2} Minute, 7/27/2023, 3502 (down)

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

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 28, 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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures fell into the 4930s as Fed Chair Jerome Powell deliver his address at the Fed’s Jackson Hole, Wyoming, and then reversed, rising into the 4420s as the closing bell approached.

On the chart, the whipsaw pushed the endpoint of wave B{-4} a bit lower than I had marked it this morning, and I’ve made the adjustment. Otherwise, this morning’s analysis stands.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight, from the 4370s surpassing 4400 and continuing to rise a bit more after the opening bell.

Federal Reserve Chair Jerome Powell will address the Fed’s annual conference at Jackson Hole, Wyoming short after 10 a.m. New York time. Under the rules of Elliott Wave Theory, speeches and other news events have little to do with the movements of the markets, beyond the occasional whipsaw. The analysis below is independent of the speech.

What does it mean? The rise is the 3rd and final wave of the upward corrective pattern that began on August 18. In Elliott wave terminology, the upward correction is wave 2{-3}, and the overnight rise is part of wave C{-3}.

For this analysis I’ve had to use Elliott wave and degree numbering to describe the various possibilities. See the “Reading the chart” section, below, for an explanation of the numbering system.

What are the alternatives? There are two.

Alternative #1: All one degree lower

It’s possible that the subwaves within wave 2{-2} are a degree smaller within the fractal structure of the chart. If that is the case, then the overnight rise is wave C{-4}, a subwave of wave A{-3}.

Alternative #2: One wave one degree lower

It’s also possible that the wave labeled A{-4} is underway and the subsequent decline is a subwave, wave A{-5}.

[S&P 500 E-mini futures at 3:30 p.m., 50-minute bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal analysis:

• A downtrend wave 3{-2}, began on July 27 is underway.
• Internally, wave 3{-2} complete its first subwave, wave 1{-3}, on August 18, and wave 2{-3}, an upward correction, began..
• Within wave 2{-3}, rising wave C{-4} is underway.

Alternative #1: All one degree lower

• Within wave 2{-3}, rising wave A{-4} is underway and is in its 3rd subwave, wave C{-5}.

Alternative #2: One wave one degree lower

• Within wave 2{-3}, declining wave B{-4} is underway and is in its 2nd subwave, rising wave B{-5}.

Big picture:

• Both the wave 2{-2} correction and wave 3{-2} downtrend are subwaves of wave 4{-1}, a downtrend that began on January 4, 2022.
• Wave 4{-1}, in turn, is a subwave of wave 5{0}, an expanding Diagonal Triangle that began on December 26, 2018.
• Wave 4{-1} may eventually reach the lower boundary of wave 5{0}, presently slightly below 1800 and declining further each day.
• Wave 4{-1} will be followed by rising wave 5{-1}, the final wave in the Triangle.

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, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 3{-2} Minute, 7/27/2023, 3502 (down)

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

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 25, 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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures fell during session, as the declining middle subwave, wave B{-4}, of an upward correction, wave 2{-3}, continues. The correction is taking the form of a Zigzag, and the B wave now underway will remain above the start of the preceding A wave, from 4350.

Wave B{-4} will be followed by rising wave C{-4}, the final wave in the corrective pattern,

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? Shortly after the closing bell, the S&P 500 E-mini futures moved above a limit imposed by the standards of Elliott wave analysis and continued to rise, reaching into the 4480s. What had been labelled a 4th wave upward correction moved above the end of the preceding 1st wave.

The limit was 4459 on the futures, crossed in overnight trading, and 4443.98 on the index, crossed as the opening bell sounded.

When the analysis and the chart no longer match, the analysis that must change. I’ve reanalyzed the chart, as described in the sections below.

What does it mean? The analytical changes are aimed at changing the degree — the relative size of the waves in relation to other waves within the fractal structure of the chart — and also changing the positioning with the larger trend of the August 18 low.

Under the prior analysis, that low had ended a 3rd wave on August 18 that had begun on August 14 within a larger downtrend that began on August 4. It now ends a 1st wave that began on July 27.

The rise that began on August under the prior analysis was a 4th wave upward correction. Under the revised analysis it is a 2nd wave upward correction. That 2nd wave correction, under the rules of Elliott wave analysis, cannot exceed the start of the preceding 1st wave, which for the futures was on July 27 from 4634.50.

What are the alternatives? None at present. I’m quite certain they will develop.

[S&P 500 E-mini futures at 3:30 p.m., 50-minute bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal analysis:

• A downtrend wave 3{-2}, began on July 27 is underway.
• Internally, wave 3{-2} complete its first subwave, wave 1{-3}, on August 18, and wave 2{-3}, an upward correction, began..
• Within wave 2{-3}, declining wave B{-4} is underway.

Big picture:

• Both the wave 2{-2} correction and wave 3{-2} downtrend are subwaves of wave 4{-1}, a downtrend that began on January 4, 2022.
• Wave 4{-1}, in turn, is a subwave of wave 5{0}, an expanding Diagonal Triangle that began on December 26, 2018.
• Wave 4{-1} may eventually reach the lower boundary of wave 5{0}, presently slightly below 1800 and declining further each day.
• Wave 4{-1} will be followed by rising wave 5{-1}, the final wave in the Triangle.

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, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 3{-2} Minute, 7/27/2023, 3502 (down)

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

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 24, 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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures so far has reached a high during the session of 4455.25. That’s 3.75 below the maximum high of the present upward correction, 4459, under the rules of Elliott wave theory.

A move above that level by the futures, but not the corresponding level on the index, will present an ambiguity. The futures move in 25-cent increments; the index, in 1-cent increments. So a move by the futures and not the index can be seen as a rounding error rather than a violation of the Elliott wave rule. for 4th waves.

The corresponding maximum high for the upward correction on the index is 4443.95.

I raised the end point of wave B{-8}. Otherwise, this morning’s analysis remains unchanged. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose to 4425.25 overnight and then declined into the 4390s.

What does it mean? The overnight peak was the end of the 2nd subwave, rising wave B{-8}, within the 2nd of three waves, declining wave B{-7}, within a small upward correction that began on August 18, wave 4{-6}. The declining 3nd subwave, wave C{-8}, is now underway.

In this discussion I’ve used the wave designations of Elliott wave analysis: A wave number (for waves within a trend) or letter (for waves within a correction), followed by a subscript in curly brackets indicating the degree of the wave. By degree I mean the wave’s position within the complex fractal structure that is the price movements. Another way of thinking of it is the wave’s relative size in relation to other, larger or smaller, waves.

The upward correction is taking the Zigzag form, meaning that it’s first segment was composed of five smaller waves, its second segment, now underway, of three subwaves, and the third segment of five subwaves.

The second segment, wave B{-7}, will be followed by rising wave C{-7}, which will complete the corrective pattern within wave 4{-6}. One characteristic of 4th waves is that they never move beyond the end of the preceding 1st wave. So that end point, 4459 in this case, is a firm upper limit on the upward correction. If the price does move above that level, then the analysis no longer matches the chart; something else is going on.

Corrections, especially 4th wave corrections, will occasionally take a compound form, meaning the correction will contain two or three corrective patterns. So when the present corrective pattern ends with wave C{-7}, there are several possible wave forms that will follow:

• If the correction takes a simple form, then the end of wave C{-7} is the end of the wave 4{-6} correction. Wave 5{-6}, the final wave within a larger downtrend, wave 3{-5}, will carry the price below the end of wave 3{-6}, at 4350, and most likely significantly below the level.
• If the correction takes a complex form, then wave C{-7} will be followed by a connector, wave X{-7}, linking the just completed first corrective pattern with a second corrective pattern, most likely a three-wave pattern. That second pattern might be the end of the upward correction, or it might nbe followed by a third corrective pattern.

What are the alternatives? None at present. I’m quite certain that ambiguities will develop, as they always do.

[S&P 500 E-mini futures at 3:30 p.m., 45-minute bars, with volume]

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal analysis:

• A downward correction, wave 3{-2}, began on July and is underway.
• Internally, the correction is in its first subwave, wave 1{-3}.
• Within wave 1{-3}, wave 5{-4} is underway.
• Within wave 5{-4}, wave 3{-5} is underway, and one degree further down, an upward correction, wave 4{-6}, is in progress, having begun on August 18.
• Wave 4{-6} completed its first subwave, rising wave A{-7}, on August 22, and began its second subwave, declining wave B{-7}.
• Wave B{-7} is in its 3rd and final subwave, wave C{-8}.

Big picture:

• Both the wave 2{-2} correction and wave 3{-2} downtrend are subwaves of wave 4{-1}, a downtrend that began on January 4, 2022.
• Wave 4{-1}, in turn, is a subwave of wave 5{0}, an expanding Diagonal Triangle that began on December 26, 2018.
• Wave 4{-1} may eventually reach the lower boundary of wave 5{0}, presently slightly below 1800 and declining further each day.
• Wave 4{-1} will be followed by rising wave 5{-1}, the final wave in the Triangle.

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, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 3{-2} Minute, 7/27/2023, 3502 (down)

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

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 23, 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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures declined during the session from the overnight high of 4440. That peak was the end of the first subwave, rising wave A{-7}, within an upward correction, wave 4{-6}, that began on August 18. The second subwave, declining wave B{-7}, is now underway.

The correction is taking the form of a Zigzag, with five subwaves in the A wave, three in the B, and five in the C. In a Zigzag, a B wave never moves below the start of the previous A wave, which in this case began from 4350.

I’ve updated the chart, and also the “What does Elliott wave theory say?” section.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight, from a low of 4402.25 to a peak of 4440.

What does it mean? The April 18 low, 4350, marked the end of the downtrending 3rd wave within a larger downtrend that began on August 10, and the beginning of a 4th wave upward correction.

Typically a 4th wave will have three subwaves forming a corrective pattern, unless the wave takes a compound form, in which case it can contain two or three corrective patterns.

A 4th wave never moves beyond the end of the preceding 1st wave. In this case, the ending price price, 4459, attained on August 11, is a firm upward boundary that the 4th wave cannot exceed. If the price within the 4th does move above that level, then it’s not a true 4th wave and the analysis will need to be redone.

What are the alternatives? None at present. I’m quite certain that ambiguities will develop, as they always do.

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

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal analysis:

• A downward correction, wave 3{-2}, began on July and is underway.
• Internally, the correction is in its first subwave, wave 1{-3}.
• Within wave 1{-3}, wave 5{-4} is underway.
• Within wave 5{-4}, wave 3{-5} is underway, and one degree further down, an upward correction, wave 4{-6}, is in progress, having begun on August 18.
• Wave 4{-6} completed its first subwave, rising wave A{-7}, on August 22, and began its second subwave, declining wave B{-7}.

Big picture:

• Both the wave 2{-2} correction and wave 3{-2} downtrend are subwaves of wave 4{-1}, a downtrend that began on January 4, 2022.
• Wave 4{-1}, in turn, is a subwave of wave 5{0}, an expanding Diagonal Triangle that began on December 26, 2018.
• Wave 4{-1} may eventually reach the lower boundary of wave 5{0}, presently slightly below 1800 and declining further each day.
• Wave 4{-1} will be followed by rising wave 5{-1}, the final wave in the Triangle.

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, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 3{-2} Minute, 7/27/2023, 3502 (down)

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

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 22, 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.

Boston Scientific Corp. (BSX)

Update 9/145/2023: I exited my short iron condor on BSX, 36 days before expiration, for a $0.52 debit per contract/share, a profit before fees of $52 per contract. Shares were trading at $52.79, up $2.26 from the entry level.

The Implied Volatility Rank at exit was 4.8%, down 41.3 points from the entry level.

I exited because the position reached 50% of maximum potential profit, my normal exit point for options positions. The profit mainly came from a collapse in implied volatility

Shares rose by 4.5% over 24 days for a 68% annual rate. The options position produced a 100% return for a 1,521% annual rate.

---

I have entered a short iron condor on BSX, using options that trade for the last time 60 days hence, on October 20. The premium is a $1.04 credit per contract share and the stock at the time of entry was priced at $50.53.

The Implied Volatility Ratio stood at 46.1%.

BSX-iron condor	Strike	Odds	Delta
Calls
Long	60.00	94.0%	6
Break-even	56.04	86.5%	13.5
Short	55.00	79.0%	21
Puts
Short	47.50	74.0%	25
Break-even	43.54	83.0%	16
Long	42.50	92.0%	7

The premium is 20.8% of the width of each of the short/long spreads. The profit zone covers a 10.9% move to the upside and a 16.1% move to the downside.

The risk/reward ratio is 3.8 :1, with maximum risk of $396 and maximum reward of $104 per contract.

How I chose the trade. I selected the short strike prices based on the expected range of the expiration close, based on the options pricing, and then adjust the strikes to coincide with the expected range based on Elliott Wave analysis.

By Tim Bovee, Portland, Oregon, August 21, 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.

3:30 p,m, New York time

Half an hour before the closing bell. The S&P 500 futures fell during to the session to 4372.25, breaking past the overnight low by a few points. The price then rose steadily, reaching into the 4410s as the closing bell approached.

The movement is a small subwave upward correction within a downtrending parent wave.

This morning’s analysis remains unchanged. I’ve updated the chart.

2:30 p.m. New York time

BSX iron condor trade. I have entered an iron condor options position on BSX, based on the expected range within which the stock price will fall at expiration, based on options pricing, modified based on Elliott wave analysis. I’ve posted an analysis of the trade.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose slightly after trading resumed overnight, from 4375.75 to 4407.50.

What does it mean? The middle subwave of a decline that began on August 10 continues, part of a larger downtrend three steps larger that began on July 27 from 4634.50.

The smaller middle wave and the larger downtrend are both 3rd waves. Each will be followed by a 4th wave upward correction, and then by a final decline that will complete each in turn.

I say “in turn” because it will take time for the various subwaves of the larger downtrend to travel their individual paths to completion. The larger downtrend, as a 3rd wave, can be expected to fall below the start of the preceding 2nd wave, which began on October 13, 2022 from 3622.75. Likely significantly below that price.

In other words, I expect the market to trace a net decline over the next months, with the usual ups and downs in the dance of the subwaves. The 2nd wave lasted for 9-1/2 months. The present 3rd wave downtrend could last longer or could be briefer, but the 2nd wave’s duration at the least gives a rough idea of the magnitude of the ongoing decline.

What are the alternatives? None at present. I’m quite certain that ambiguities will develop, as they always do.

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

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal analysis:

• A downward correction, wave 3{-2}, began on July and is underway.
• Internally, the correction is in its first subwave, wave 1{-3}.
• Within wave 1{-3}, wave 5{-4} is underway.
• Within wave 5{-4}, wave 3{-5} is underway, and one degree further down, wave 3{-6} is in progress.

Big picture:

• Both the wave 2{-2} correction and wave 3{-2} downtrend are subwaves of wave 4{-1}, a downtrend that began on January 4, 2022.
• Wave 4{-1}, in turn, is a subwave of wave 5{0}, an expanding Diagonal Triangle that began on December 26, 2018.
• Wave 4{-1} may eventually reach the lower boundary of wave 5{0}, presently slightly below 1800 and declining further each day.
• Wave 4{-1} will be followed by rising wave 5{-1}, the final wave in the Triangle.

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, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 3{-2} Minute, 7/27/2023, 3502 (down)

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

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 21, 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.