3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures worked their way a bit higher during the session, into the 5320s. This morning’s analysis is unchanged. Wave 5{-6} within wave 3{-5} continues its rise. 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 into the 5310s as the opening bell approached.

What does it mean? The low-degree uptrending 5th wave that began on March 15 continues and is in its 3rd of five subwaves.

When the 5th-wave uptrend is complete, it will also mean the end of the 3rd-wave uptrend one degree larger. A downward 4th-wave correction will follow.

Those waves are part of a three-level series of 3rd-waves, each of increasing degree, culminating with a rising 5th wave that began on October 13, 2023.

What are the alternatives? For a while now this section has noted the uncertainty of the wave degrees within the very large 5th wave — wave 5{-1} on the chart — that encompasses all of the smaller price movements happening since October last year. I’m dropping that notice, as things seems to be working out with the degrees as labeled. If there’s evidence to the contrary, then that alternative analysis will return.

[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:.

• Rising wave 5{0} is underway.
• It is in its final subwave, wave 5{-1}
• Within wave 5{-1}, rising waves 3{-2}, 3{-3} and 3{-4} are underway, as is the smallest wave labeled on the chart, wave 3{-5}.
• Wave 3{-5} is in its 5th subwave, wave 5{-6}
• Within wave 5{-6}, the middle subwave, wave 3{-7}, is underway.

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, March 21, 2024

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.