3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures rose during the session into the 4380s, remaining below the overnight high, 4390.25.

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

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to fall overnight, reaching into the 4350s.

What does it mean? Today’s analysis has a bit of complexity, and I’ve had to use the Elliott wave nomenclature to describe it. In short the

The continuing decline has made the expanding Diagonal Triangle analysis increasingly untenable, and I’ve pulled back the chart to a wider view and done a re-analysis.

• I’ve moved the {-5} degree up one to {-4}, as being more consistent with prior waves of that degree.
• I’ve recounted the subwaves of wave 1{-3} to eliminate the expanding Diagonal Triangle..

Under the new principal analysis, the downtrend that began on July 27, wave 3{-2} continues and is in its 1st subwave, wave 1{-3}, which in turn is in its final subwave, wave 5{-4}.

Wave 5{-4} is in its middle subwave, wave 3{-5}, which is in its middle subwave, wave 3{-6}.l

When wave 5{-4} is complete, it will also be the end of wave 1{-3}, which will be followed by an upward correction that will retrace much of the decline since the July 27 peak, 4634.50. Under the rules of Elliott wave analysis, a 2nd wave never moves beyond the starting point of the preceding 1st wave, and so 4634.50 is the upper limit of the correction.

In other words, the chart shows an entirely straightforward downtrend.

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

[S&P 500 E-mini futures at 3:30 p.m., 2-hour 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 18, 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 further during the session, reaching into the 4370s. The decline lends credence to this morning’s second analysis, which sees the 5th and final subwave within the expanding Diagonal Triangle as being underway.

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 to 4409.50 and then rose back into the 4430s.

What does it mean? The low was yet another low within the expanding Diagonal Triangle that began on August 9.

At this point the chart points us toward two analyses of equal likelihood.

The triangle will have five subwaves when complete.

The first analysis, which was the principal analysis in yesterday’s Trader’s Notebook, sees the declining 4th wave of the triangle as being underway. Under this scenario,, the price will eventually rise to the triangle’s upper boundary, and then a declining 5th wave will complete the triangle.

The second analysis, which I’ve switched to today less out of confidence in its correctness and more with a goal of illustrating what it look like, sees the rise that ended on August 14 as being the completion of the 4th wave within the triangle, but in a truncated form. The set-up would have sent it climbing to the upper boundary, but the bullish sentiment simply wasn’t strong enough. The decline that has followed is the 5th and final wave of the triangle.

The triangle is the 5th subwave within a larger downtrend, a 1st wave that began on July 27, and will be followed by a 2nd-wave upward correction.

The ambiguity between the two scenarios won’t be resolved soon. If the price reverses and rises vigorously toward the upper boundary, then the decline from August 9 is over, but is it the 4th wave that’s over or the entire triangle? In other words, is the subsequent rise the 5th subwave within the triangle or the 2nd wave upward correction?

The answer won’t become clear until the price reaches the upper boundary of the triangle. If it moves past it and continues to climb, then the triangle has ended and the upward correction is underway. If it pauses and then declines to the region of the lower boundary, then the 5th subwave of the triangle is continuing.

Sufficiently confusing? I think so, too. Elliott wave analysis in my opinion provides the best context for understanding what the market is doing, but it’s a predictive tool only in the contextual sense: If this then that will happen in the futures.

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

What are the alternatives? In addition to the major ambiguity discussed above, there is another possibility. 

Connector wave scenario

The long-running upward correction, wave 2{-2}, that has dominated the chart since last autumn may still be underway. Wave 2{-2} ran from 3502 to 4634.50. The low so far in the subsequent decline is 4459. That means that the decline has retraced only 15.5% of the upward correction, meaning that the scenario seeing the present decline as connecting two corrective patterns within an ongoing upward correction remains plausible.

• Wave 2{-2}, an upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-2}, will follow.

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

Both principal analyses:

• 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}, things become a bit more ambiguous, since the precise degree of the subwaves won’t become clear until the downtrend has progressed further.
• I’ve chosen, as a guess, to label the subwave of wave 1{-3} as being in its first wave, 1{-4}, which in turn is in its final subwave, wave 5{-5}. And within wave 5{-5}, wave 5{-6} is underway.
• Within wave 5{-6},
  • either the the truncated next-to-the-last subwave, wave 4{-7}, ended on August 9 and the final subwave, wave 5{-7}, began
  • or wave 4{-7} is stilll underway.

Alternative analysis:

• Wave 2{-2}, and upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-2}, will follow

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 17, 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 4420s after the Federal Open Market Commitee released the minutes of the July 25-26 meeting.

As is the practice when dealing with both price channels and triangles, I’ve redrawn the lower boundary to account for repositioning a few days back of the end of wave 3{-7} to the August 11 low. That adjustment brings most of what has happened since within the boundaries of the expanding Diagonal Triangle that began on August 9.

That needful repositioning lends credence to the this morning’s Principal Analysis, which sees the next to the last subwave of the triangle, wave 4{-7}, as still being underway. When it is complete, the final subwave, wave 5{-7}, will carry the price back to the upper boundary, which is presently in the 4570s and is rising every minute — that’s the “expanding” part of an expanding Diagonal Triangle.

Wave 5{-7} will end the triangle, which is wave 5{-6}, and will aso end the parent wave, 5{-5}, and the grandparent wave, 1{-4}.

An upward correction, wave 2{-4}, will follow. Under the rules discovered by R.N. Elliott, the developer of Elliott wave analysis, a 2nd wave must remain below the start of the preceding 1st wave of the same degree, which began on July 27 from 4634.50

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures tracked sideways overnight, remaining in the 4440s and 4450s, slightly below the lower boundary of the expanded Diagonal Triangle that began on August 9. Only once did it break from that range, rising to 4467.25, and then retreating.

What does it mean? The overnight pattern does nothing to resolve the ambiguities in the chart. The triangle will have five subwaves. Which subwave is in progress: The 4th, or a much-truncated 5th?

The normal form taken by a triangle is for the waves to bounce off of the price-channel boundaries. The 4th subwave so far has only gotten about halfway to the upper channel. So I’ve chosen a conservative analysis, marking the chart to show that the 4th subwave is underway.

Sometimes waves are truncated — they fall short of the boundary by a considerable amount. If that’s the case here, then the rising 4th wave ended at the August 14 high, 4517.25, and the declining 5th wave began.

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

What are the alternatives? There are three:

Alternative #1: Final wave scenario

I discussed Alternative #1 above. Here I add the Elliott wave numbers.

• Rising wave 4{-7}, a subwave of wave 5{-6}, an expanding Diagonal Triangle, ended August 14, at 4517.75. Declining wave 5{-7}, the final subwave of the triangle, began from that point.

Alternative #2: Connector wave scenario

The long-running upward correction, wave 2{-2}, that has dominated the chart since last autumn may still be underway. Wave 2{-2} ran from 3502 to 4634.50. The low so far in the subsequent decline is 4459. That means that the decline has retraced only 15.5% of the upward correction, meaning that the scenario seeing the present decline as connecting two corrective patterns within an ongoing upward correction remains plausible.

• Wave 2{-2}, an upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-2}, will follow.

Alternative #3: Choosing degree

• I have listed the Triangle as being the from of wave 5{-6}. It’s still early days in the decline from July 27, and that wave’s degree could be higher — wave 5{-5} or wave 5{-4}.

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}.

Alternative analysis #1:

• Rising wave 4{-7}, a subwave of wave 5{-6}, an expanding Diagonal Triangle, ended August 14, at 4517.75. Declining wave 5{-7}, the final subwave of the triangle, began from that point.

Alternative analysis #2:

• Wave 2{-2}, and upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-2}, will follow

Alternative analysis #3:

• Within wave 1{-3}, things become a bit more ambiguous, since the precise degree of the subwaves won’t become clear until the downtrend has progressed further.
• I’ve chosen, as a guess, to label the subwave of wave 1{-3} as being in its first wave, 1{-4}, which in turn is in its final subwave, wave 5{-5}.
• The final subwave within wave 5{-5} began overnight. Declining wave 5{-6} is now underway.
• Wave 5{-6} is its 2nd of five subwaves, an upward correction designated wave 2{-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 16, 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 has traded sideways during the session, ranging from the 4450s to the 4470s and then narrowing as it repeatedly crossed the lower boundary of the expanding Diagonal Triangle that has been underway since August 9.

As of the time I’m posting, the price dropped to new lows within the triangle, to 4151.25 when I produced the chart, and immediately thereafter down to 4448.25.

As was the case this morning, the triangle’s present rising subwave, wave 4{-7}, remains well below the upper boundary, it’s eventual target. The decline that began on August 14 hasn’t broken far enough below the lower boundary to justify declaring the August 9 peak to be the end of a truncated wave 4{-7} and the beginning of the final subwave, wave 5{-7}.

So for now, I’m sticking with this morning’s analysis. Wave 4{-7} continues. However, it is a close call between that scenario and this morning’s Alternative #1, the wave 5{-7} scenario.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures peaked overnight at 4517.85 and then fell back to the 4470s.

What does it mean? The rise carried the price about halfway to the upper boundary of an expanding Diagonal Triangle that began on August 9, and the subsequent decline has come close to the lower boundary. Based on the typical form taken by an expanding Diagonal Triangle, I expect a reversal with the rise carrying the price above the overnight high. (The triangle boundaries are marked on the chart n red.)

The rise that began on August 11 is the 4th of five subwaves of the Triangle, wave 4{-7}. Sometimes a 4th wave will fail to reach the triangle boundary, and if that is the case, then the overnight rise was the final leg of wave 4{-7} and the subsequent decline is part of the triangle’s final subwave, wave 5{-7}.

At this point I think it’s more likely that the 4th wave is still underway.

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

What are the alternatives? There are three:

Alternative #1: Final wave scenario

• Rising wave 4{-7}, a subwave of wave 5{-6}, an expanding Diagonal Triangle, ended today, August 16, at 4517.75. Declining wave 5{-7}, the final subwave of the triangle, began from that point.

Alternative #2: Connector wave scenario

The long-running upward correction, wave 2{-2}, that has dominated the chart since last autumn may still be underway. Wave 2{-2} ran from 3502 to 4634.50. The low so far in the subsequent decline is 4459. That means that the decline has retraced only 15.5% of the upward correction, meaning that the scenario seeing the present decline as connecting two corrective patterns within an ongoing upward correction remains plausible.

• Wave 2{-2}, an upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-2}, will follow.

Alternative #3:

• I have listed the Triangle as being the from of wave 5{-6}. It’s still early days in the decline from July 27, and that wave’s degree could be higher — wave 5{-5} or wave 5{-4}.

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}, things become a bit more ambiguous, since the precise degree of the subwaves won’t become clear until the downtrend has progressed further.
• I’ve chosen, as a guess, to label the subwave of wave 1{-3} as being in its first wave, 1{-4}, which in turn is in its final subwave, wave 5{-5}.
• The final subwave within wave 5{-5} began overnight. Declining wave 5{-6} is now underway.
• Wave 5{-6} is its 2nd of five subwaves, an upward correction designated wave 2{-7}.

Alternative analysis:

• Wave 2{-2}, and upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-2}, will follow

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, 4634.50 (down) [The beginning price was in error and has been corrected.]

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 15, 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 began the session low, from 4469, rising as the day progressed to 4503.25, two points above the overnight peak.

The analysis remains unchanged from this morning. Rising wave 4{-7} continues. It is the next-to-the-last wave within wave 5{-6}, an expanding Diagonal Triangle.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures bounced between the 4460s and around 4500 overnight, continuing the sideways pattern that closed last week’s chart.

What does it mean? Under the principal analysis, the price has been bouncing off of the lower boundary of an Expanding Diagonal Triangle that began on August 9. The triangle, whose boundaries are marked n red on the chart, is the final leg of a downtrend that began on August 4, which itself is part of a larger downtrend that began on July 27 and of a still larger downtrend, that began on January 4, 2022.

The sideways movement that has dominated the last few days is atypical of an expanding Diagonal Triangle. The price should bounce off the lower boundary and head back to the still rising upper boundary, and then bounce and fall again. The present hugging of the lower boundary breaks no rules of Elliott wave analysis, but it’s a bit unusual.

To accomodate the sideways pattern, I’ve moved the endpoint of wave 3{-7} to Friday’s low, 4459.

What are the alternatives? There are two:

Alternative #1:

• Wave 2{-2}, and upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-2}, will follow.

Alternative #2:

• I have listed the Triangle as being the from of wave 5{-6}. It’s still early days in the decline from July 27, and that wave’s degree could be higher — wave 5{-5} or wave 5{-4}.

[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}, things become a bit more ambiguous, since the precise degree of the subwaves won’t become clear until the downtrend has progressed further.
• I’ve chosen, as a guess, to label the subwave of wave 1{-3} as being in its first wave, 1{-4}, which in turn is in its final subwave, wave 5{-5}.
• The final subwave within wave 5{-5} began overnight. Declining wave 5{-6} is now underway.
• Wave 5{-6} is its 2nd of five subwaves, an upward correction designated wave 2{-7}.

Alternative analysis:

• Wave 2{-2}, and upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-2}, will follow

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 14, 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 meandered between the 4460s and the 4470s, repeatedly bouncing off the lower boundary of the expanding Diagonal Triangle that began on August 9. This morning’s analysis is unchanged. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures hit a high in the 4490s early in overnight trading and then declined, dropping sharply by 15 points when the Producer Price Index was released an hour before the opening bell.

What does it mean? The price decline bounced off of the lower boundary of an expanding Diagonal Triangle that began on August 9. It is the final wave within a low-degree downtrend that began on August 4, which is part of a much larger 3rd wave downtrend that began on July 27 from 4634.50 and which will eventually carry the price below 3500, perhaps significantly below that level.

The Triangle’s boundaries are marked on the chart in red.

Internally, the Triangle has completed three subwaves and is now in its rising 4th subwave, which will end around the upper boundary of the Triangle, presently in the 4550s and rising every minute, and will reverse downward as the 5th and final subwave.

The larger downtrend is wave 3{-2}, and the present expanding Diagonal Triangle is wave 5{-6}, four degrees smaller from than the downtrend. Internally, the Triangle is in rising wave 4{-7}.

A larger upward correction will follow, a 2nd wave that will take back a portion of the decline since July 27 and that will remain below 4634.50.

What are the alternatives? Unchanged from the day before.

Alternative #1:

• Wave 2{-2}, and upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-2}, will follow.

Alternative #2:

• I have listed the Triangle as being the from of wave 5{-6}. It’s still early days in the decline from July 27, and that wave’s degree could be higher — wave 5{-5} or wave 5{-4}.

[S&P 500 E-mini futures at 9:35 a.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}, things become a bit more ambiguous, since the precise degree of the subwaves won’t become clear until the downtrend has progressed further.
• I’ve chosen, as a guess, to label the subwave of wave 1{-3} as being in its first wave, 1{-4}, which in turn is in its final subwave, wave 5{-5}.
• The final subwave within wave 5{-5} began overnight. Declining wave 5{-6} is now underway.
• Wave 5{-6} is its 2nd of five subwaves, an upward correction designated wave 2{-7}.

Alternative analysis #1:

• Wave 2{-2}, and upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-2}, will follow.

Alternative analysis #2:

• The Diagonal Triangle is wave 5{-5} within declining wave 1{-4} within wave 1{-3}, the first subwave within the downtrend, wave 3{-2}, that began on July 27.
• Or it could be one degree higher, wave 5{-4} within wave 1{-3} within wave 3{-2}.

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 11, 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 reached a high of 4544.75 during the session and then fell back into the 4470s. The final wave of the decline that began on August 9, wave 5{-6}, appears to be taking the form of an expanding Diagonal Triangle. I’ve shown the triangle boundaries in red.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures wandered between the 4490s and the 4510s until the latest inflation numbers were announced. At that point the price whipsawed, rocketing to 4525, plunging to 4494, and then returning to the 4510s, slightly above where it had been a minute before the announcement.

What does it mean? The whipsaw was part of a the 2nd of three subwaves within a small upward correction within a downtrend, one degree larger, that began on August 9. That downtrend is in turn the final subwave within a larger downtrend that began on August 4, the final wave of a series of nested downtrends within a major downtrend that began on July 27.

The July 27 downtrend, a 3rd wave, will carry the price below the starting point of the preceding 2nd wave correction, 3502, and most likely significantly below that level.

So whatever the daily ups and downs and occasional whipsaws, the trend of the market is down and main continue on that course for months.

What is the alternative?

• Wave 2{-2}, and upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-2}, will follow

[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}, things become a bit more ambiguous, since the precise degree of the subwaves won’t become clear until the downtrend has progressed further.
• I’ve chosen, as a guess, to label the subwave of wave 1{-3} as being in its first wave, 1{-4}, which in turn is in its final subwave, wave 5{-5}.
• The final subwave within wave 5{-5} began overnight. Declining wave 5{-6} is now underway.
• Wave 5{-6} is its 2nd of five subwaves, an upward correction designated wave 2{-7}.

Alternative analysis:

• Wave 2{-2}, and upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-2}, will follow

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 10, 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 reached a low of 4478.25 during the session and the b rose back into the 4510s, remaining below the overnight high, 4536.25.

The final wave of the low-degree downtrend that began on on August 4 continues. Alternative analysis #1 from this morning is no longer possible. Otherwise, the analysis is 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 overnight from 4515.50 to 4536.25 and then pulled back.

What does it mean? The 4536.25 peak completes the 4th wave within a downtrend that began on August 4 and marks the start of the 5th and final wave.

The August 4 downtrend is a subwave within a nested series of subwaves of increasing size encompassed within the largest of the set, a significant 3rd-wave downtrend that began on July 27 from 4634.50.

What are the alternatives? There are two.

Alternative analysis #1:

It’s possible that the price will reverse, giving the 4th subwave a bit more distance to the upside before it reaches completion.

Note: The price movement during the session made this alternative impossible.

Alternative analysis #2:

At a larger scale, it’s possible that the 2nd-wave upward correction that preceded the 3rd-wave downtrend will add a third corrective pattern to the two that have already been completed. If this turns out to be the case, then the decline from July 27 is a wave connecting the second corrective pattern within the compound correction with a third and final pattern.

[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}, things become a bit more ambiguous, since the precise degree of the subwaves won’t become clear until the downtrend has progressed further.
• I’ve chosen, as a guess, to label the subwave of wave 1{-3} as being in its first wave, 1{-4}, which in turn is in its final subwave, wave 5{-5}.
• The final subwave within wave 5{-5} began overnight. Declining wave 5{-6} is now underway.

Alternative analysis: #1:

• Rising wave 4{-6} is still underway.

Alternative analysis #2:

• Wave 2{-2}, and upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-2}, will follow

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 9, 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 the session to a low of 4482 and then rose, returning to the 4510s.

The upward reversal is a subwave, wave 4{-6}, within the final leg, wave {5-5}, within the decline that began on July 27, wave 1{-4}, a downtrend within two progressively larger downtrends, wave 1{-3} and wave 3{-2}.

Wave 4{-6} will be followed by a further push downward, as wave 5{-6}, which, when complete, will also be the end of wave 5{-5} and its parent, wave 1{-4}.

The subscripts in curly brackets, showing the placement of the waves within the fractal structure of the chart — their degrees — are solid at the higher levels, and less certain at the smaller. For example, wave 5{-5} may in fact be one degree higher, {-4}, or it could be one degree lower, {-6}, pushing the subwaves down a degree to {-7}. The degrees will become clearer wave 3{-2} downtrend develops.

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

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell overnight, from 4541 into the 4490s.

What does it mean? The rise from the August 7 low, 4493.75, was an upward correction within last leg of the larger downtrend that began on July 27. That last leg is itself a subwave of downtrends. each larger than the one within it, that all began on that date, which will appear on future charts as a major reversal point.

What are the alternatives? The downtrends, under the principal analysis, follow an upward correction that lasted nearly 10 months. The correction took a compound form and completed two corrective patterns.

Under the alternative analysis, it’s possible that the decline from July 27 is an X-wave, a connector linking the second corrective pattern with a third pattern that, when complete, will also be the end of the correction.

The further the price falls, the less likely this scenario becomes.

[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 analysis.

Principal analysis:

• An 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}, things become a bit more ambiguous, since the precise degree of the subwaves won’t become clear until the downtrend has progressed further.
• I’ve chosen, as a guess, to label the subwave of wave 1{-3} as being in its first wave, 1{-4}, which in turn is in its final subwave, wave 5{-5}.

Alternative analysis:

• Wave 2{-2}, and upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-3}, will follow

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 8, 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 during the session, so far reaching into the 4530s. The small upward correction that began overnight, a subwave of downtrending wave 5{-5}, continues and is now in its third and possibly final leg. Wave 5{-5} is a subwave of wave 1{-4} within a large downtrend, wave 3{-3}, than began on June 27.

This morning’s analysis is unchanged. I’ve updated the upper chart, which is a close-up view of the futures. The lower chart, a big picture view of the S&P 500 index, is unchanged from this morning.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose after trading resumed overnight, from 4500.50 into the 4520s.

What does it mean? The upward correction that began last October, wave 2{-2}, ended on July 27, and a downtrend that will last many months, wave 3{-2}, has begun.

The overnight rise is a small upward correction within the final wave of the earliest stage of the downtrend.

In Friday’s analysis I gave equal likelihood to the downtrend scenario and several alternatives. The clear five-wave pattern of the decline shifted the odds in favor of the downtrend, which is now the principal analysis.

The upward correction, now ended, began from 3502. The downtrend will carry the price below that level, and perhaps significantly below. The downtrend is a third wave, which is never the shortest of the three trending subwaves within a larger trend, and quite often, the third wave is the longest of them all.

The description most often associated with third waves is “powerful”.

All of this is happening within downtrending wave 4{-1}, which began on January 4, 2022. That wave is a subwave within an expanding Diagonal Triangle, wave 5{0}, that began on December 26, 2018.

What are the alternatives? It remains possible, although less likely, that the upward correction is still underway. The correction took a compound form and has completed two corrective patterns. Under this alternative scenario, the decline is a wave connecting the prior second corrective pattern to a third pattern that will complete the correction.

Reading the chart. The upper chart, of the S&P 500 futures, is a close-up focused on the decline that began on July 27. The lower chart, of the S&P 500 index, pulls back and shows the expanding Diagonal Triangle that began in 2018 and encompasses everything discussed in the analysis. The price-channel boundaries of the Triangle are shown in blue.

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.

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

[S&P 500 index at 9:35 a.m., 3-day bars]

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

Principal analysis:

• An 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}, things become a bit more ambiguous, since the precise degree of the subwaves won’t become clear until the downtrend has progressed further.
• I’ve chosen, as a guess, to label the subwave of wave 1{-3} as being in its first wave, 1{-4}, wich in turn is in its final subwave, wave 5{-5}.

Alternative analysis:

• Wave 2{-2}, and upward compound correction that began on October 13, 2022 completed a second corrective pattern on July 27.
• The subsequent decline is wave X{-3}, a downward connector between the second corrective pattern and the future third corrective pattern.
• Once the third corrective pattern within wave 2{-2} has ended, a powerful downtrend, wave 3{-3}, will follow.

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)

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 7, 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.

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Based on a work at www.timbovee.com.