3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures rose into the 5990s amid a largely sideways pattern mostly above the 61.8% Fibonacci level.

Elliott Wave Theory: The pattern was a corrective subwave within a larger 3rd-wave uptrend within a still larger 5th-wave uptrend that began on November 19.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell from the 5970s down to the 5940s, then rose again, approaching the 61.8% Fibonacci level as the opening bell approached.

What does it mean? The rising 3rd Elliott Wave within the rising 5th wave that began on November 19 continues. The 3rd wave is in its 4th subwave—a downward correction that will be followed by a 5th and final subwave, completing the 3rd wave within the 5th wave.

Each wave on the chart is labeled with a wave number followed by a subscript in curly brackets, showing the wave’s position in relation to the Intermediate wave, wave 5{0}, which began in December 2018.

The smallest ongoing wave within the series discussed above appears on the chart as wave 4{-13} within wave 3{-12} within wave 5{-11}.

When wave 5{-11} is complete, it will also mark the end of waves 5{-10}, 5{-9}, and 5{-8}, as well as the even larger wave 3{-7}, which began on August 7. A large 4th-wave downward correction, wave 4{-7}, will follow.

[S&P 500 E-mini futures at 3:30.m., 25-minute bars, with volume]

What are the alternatives? I’ve labeled the first subwave of the rising 5th wave as being one degree smaller than the parent wave. It’s possible it is two degrees smaller, making them subwaves of wave 1 within wave 5.

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 final subwave, uptrending wave 5{-10}.
• Wave 5{-10} is in its final subwave, wave 5{-11}, which is in its middle subwave, wave 3{-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)
• 5{-10} (unnamed), 11/4/2024, 5824.25 (up)
• 5{-11} (unnamed), 11/19/2024, 5933 (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 22, 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.