3:30 p.m. New York times

Half an hour before the closing bell. The S&P 500 futures fell during the session, back below 5210. In the discussion that follows, I’ll be using the wave numbers and degree designators that appear on the chart. See the “Reading the chart” section, below.

Applying Elliott Wave Theory, I reanalyzed the internal structure of rising wave B{-6}, the middle subwave of the falling 4th-wave correction that began on March 31 with its first subwave, falling wave A{-6}.

This morning’s analysis had wave B{-7}, a subwave of wave B{-6}, as having ended having ended at the opening-bell high. This afternoon’s analysis labels that high as the end of wave rising A{-7} and the beginning of falling wave B{-7}, which will have three subwaves.

Wave B{-7} will be followed by rising wave C{-7}, which under the Elliott Wave Theory rule discussed this morning, must carry the price at minimum up to a 90% retracement of wave A{-6}, to 5319.25 or greater.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell into the 5240s overnight and then rose to the 5260s as the opening bell approafhed.

What does it mean? Rising wave B — the middle subwave of the 4th-wave downward correction that began on March 31 — continues. Since the 4th wave is tracing a Flat pattern, it is required by a review of Elliott Wave Theory to retrace 90% of the preceding A wave. The blue dashed line on the chart shows the 90% retracement level, which wave B has not yet attained.

The waves under discussion, as labeled on the chart, are waves A{-6} and B{-6} within the upward correction, wave 4{-5}, and waves B{-7} and C{-7} within wave B{-6}. The subscript numbers in the curly brackets is the wave’s degree within the chart’s fractal structure, relative to what Elliott called the Intermediate Degree.

What are the alternatives? None at present. Without a data future ambiguities will ahow up.

[S&P 500 E-mini futures at 3:30 p.m., 90-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 a wave of Intermediate Degree that began in December 2018.
• 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}.
• Downtrending wave 4{-5} is in its 2nd subwave, rising wave B{-6}.

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:
• 5{-1} Minor, 10/13/2022, 3502 (up) (futures), 3491.58 (up) (index)
• S&P 500 Futures:

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, April 9, 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.

License

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Based on a work at www.timbovee.com.