12:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures fell a bit further during the session, into the 4560s. 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 remained in a narrow range overnight, in the 4560s and 4570s, as trading resumed after the Thanksgiving Holiday in the United States. Today’s session will be shortened; the closing bell will sound at 1 p.m. New York time.

What does it mean? Prices in post-holiday shortened sessions tend to go nowhere, and so far today’s chart is no exception to that tendency.

The November 22 high, 4580.50, was the peak so far of the upward correction that began on October 27. It leaves in place the question that has been with us all week: Is the latest peak the end of the initial subwave, wave A, within the 4th wave upward correction that began on October 27? Or does the correction have bit higher to go?

In Elliott wave terms, the ambiguity cab be phrased as two scenarios, each of equal likelihood:

• Scenario #1: Rising wave A ended continues to work through it’s 5th and final wave, or
• Scenario #2: Rising wave A ended on November 22 and falling wave B has begun.

What are the alternatives? And those two scenarios encompass the principal analysis and the alternative. The problem is, we don’t yet know which is which.

[S&P 500 E-mini futures at 12:30 p.m., 55-minute bars, with volume]

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

• A downtrend, wave 3{-2}, began on July 27 and is underway.
• Within wave 3{-2}, an upward correction, wave 4{-3}, began on October 27.
• Lower still, two scenarios of equal probability:
  • Scenario #1:
    • Within wave 4{-3}, wave A{-4} continues.
    • Further down the list, wave 5{-5}, 6{-5}, 7{-5} and 8{-5} are underway and nearing completion.
  • Scenario #2:
    • Wave A{-4} ended on November 22 and wave B{-4} began its downward trek.

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)
• 4{-3} Minuette, 10/27/2023, 4122.25 (up)
• A{-4} Subminuette, 10/27/2023, 4122.25 (up)

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, November 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.