3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures rose during the session, to 6107.25, reaching above the high attained the prior day. Clearly the price is searching for a top, launching persuasive reversals that turn out not to amount to much.

Under this afternoon’s Elliott Wave Theory analysis, the 5th wave that began on December 1 is still its middle subwave — wave 3. I’ve redone the chart to conform.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures peaked on December 4 at 6102.25 shortly before the session ended and then swung into a sideways movement that continued overnight.

What does it mean? The sideways movement is a 4th-wave downward correction, the next-to-the-last subwave of the 5th-wave uptrend that began on December 1 from 6000.25.

The correction will be followed by a low-degree 5th-wave uptrend, the final subwave of the rise that began on December 1.

Waves within waves. Waves of the chart are labeled with the wave number followed by a subscript in curly brackets showing the wave’s position in the fractal structure of the chart relative to the Intermediate Degree. The present intermediate degree is wave 5{0}, which began on December 26, 2018. A stock’s movement is always structured as waves within waves, small waves within larger waves that are in turrn subwaves of even larger waves.

Here are the present waves as labeled on the chart.

The December 4 peak, 6102.25, is the end of wave 3{-14} and the start of wave 4{-14} within wave 5{-13}, which began on December 1.

Wave 5{-13} is the smallest of a series of nested 5th waves, up to wave 5{-8}, which in turn is nested within wave 3{-7}.

Wave 4{-14} will be followed by wave 5{-14}. When wave 5{-14} ends, it will simultaneously be the end of wave 5{-13} and the whole series of nested 5th waves up to wave 5{-8}, and also the end of wave 3{-7).

A relatively large downward correction, wave 4{-7}, will ensue.

[S&P 500 E-mini futures at 3:30 p.m., 45-minute bars, with volume]

What are the alternatives? The wave structure has clarified, resolving yesterday’s alternative. There are at present no ambiguities.

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 appears to have completed its middle subwave, wave 3{-12}, within wave 5{-13}.
• Wave 5{-13} is now underway and is in its middle subwave, wave 3{-14}

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)
• 5{-12} (unnamed), 11/27/2024, 6000.25 (up)
• 5{-13} (unnamed), 12/1/2024, 6036 (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, December 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.