3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures peaked at 4597 during the session and then pulled back into the 4550s. The price remains above the November 28 low, 4547, which was the start of the present rise into the 4590s.

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 rose overnight, reaching a new high for the present upward correction.

What does it mean? The correction, a 4th wave, began on October 22., and the new high resolves the conundrum that has dominated the analysis since last week: Has the first subwave of the correction, wave A, ended or not?

The answer is that wave A is still underway. Under the rules of Elliott Wave Theory, no subwave of the correction can move above the starting point of the preceding 1st wave, which was 4634.50 on July 27. The 5th and final subwave within the correction has reached the low 4590s so far and so has room for a further rise. Although, not a lot, less than 45 points.

After wave A is complete, the middle subwave of the correction, wave B, will begin, and if it is typical it will retrace 38% to 79% of wave A. That’s a tendency, not a hard rule.

The present rise began on November 28 from 4547 and is part of a 5th subwave several degrees down within wave A. While solving a conundrum, the rise simultaneously reinstates the conundrum: Any peak, including the most recent, could be the end of the present rise and also the end of wave A.

What are the alternatives? Any pullback from the high in theory means that wave B may have already begun. Until there’s a stronger pullback to the downside, the weight of evidence favors the principal analysis: Wave A is still underway.

[S&P 500 E-mini futures at 3:30 p.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 and is underway.
• Within wave 3{-2}, an upward correction, wave 4{-3}, began on October 27.
• The initial wave of the correction, wave A{-4}, continues.
• Wave A{-4} has reached its 5th and final subwave, wave 5{-5} and a series of smaller 5th waes, down to wave 5{-8}. When the smallest of the 5th waves is complete, it will cascade up, also ending wave 5{-5} and its parent, wave A{-4}.

Alternative Analysis:

• Wave A{-4} ended on November 29 and wave B{-4} began its downward journey..

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 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.