3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures reversed and rose sharply during the session, reaching slightly above 5800.

Elliott Wave Theory: The movement clarified the analysis of the 4th wave upward correction that began on October 31. It has not ended and is still underway.

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 the 5730s into the 5750s.

What does it mean? Elliott Wave Theory sees the rise as a small upward correction within a downtrending 5th wave, the final subwave within wave C, the final wave of the larger 4th-wave downward correction that began on October 17.

When the 5th wave is complete, it will also be the end of wave C and most likely, the end of the 4th-wave correction.

Most corrections have a single three-subwave corrective pattern. Occasionally, a subwave will take a compound form, containing two or three corrective patterns.

ln any case, when wave 4 that began in mid-October from 5927.25 will, at its end, will be followed by an uptrending 5th wave that, in many cases, will reach beyond that 4th wave’s starting point, sometimes coming up short — truncation — or moving further than expected — extension,

The end of the 5th wave will also be the end of two 5th waves, each one degree higher than the one before, and the end of the 3rd wave that encompasses them all. That wave 3 began on August 7 from 5182.

At that 3rd wave’s endpoint, a 4th-wave downward correction will begin, larger than the recent 4th waves we’ve seen.

[S&P 500 E-mini futures at 3:30 p.m., 90-minute bars, with volume]

What are the alternatives? None at present. The next ambiguity to sort through will likely being determining when the 5th wave that began on November 1 has ended, an exercise known as bottom fishing.

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 5{-2}, 5{-3} and 5{-4} are underway, as is wave 5{-5}.
• Wave 5{-5} is in its initial subwave, wave 1{-6}, which in turn is in its middle subwave, wave 3{-7}.
• Wave 3{-7} is in its final; subwave, uptrending wave 5{-8}.
• Wave 5{-8} is in its final subwave, wave 5{-9}, which is in its next-to-the-last subwave, corrective wave 4{-10}, which is in its final subwave, wave C{-11}.
• Wave C{-11} is in its subwave, wave 5{-12}.

Long-term Waves.

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
• 5{-1} Minor, 10/27/2023, 4127.25 (up)
• 3{-2} Minute, 10/27/23, 4127.75 (up)
• 3{-3} Minuette, 10/27/23, 4127.75 (up)
• 5{-4} Subminuette, 4/18/2024, 4963.50 (up)
• 5{-5} Micro, 8/5/2024, 5120 (up)
• 1{-6} Submicro, 8/5/2024, 5120 (up)
• 3{-7} Minuscule, 8/7/2024, 5182 (up)
• 5{-8} (unnamed), 9/6/2024, 5394 (up)
• 5{-9} (unnamed), 10/2/2024, 5724 (up)
• 4{-10} (unnamed), 10/17/2024, 5927.25 (down)
• C{-11} (unnamed), 10/9/2024, 5893 (down)
• 5{-12} (unnamed), 11/1/2024, 5803.75 (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, November 5, 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

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.