3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures continued to fall during the session, reaching into the 5060s as the closing bell approached.

The length of decline triggered a reanalysis favorable to this morning’s alternative Elliott Wave Theory analysis. The December 6 peak at 6111 was the end of a 3rd wave, and the decline that has followed is a 4th-wave downward correction that is in its initial subwave, wave A.

This morning’s analysis stands with the exception of those smaller waves.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures swung between 6105.75 and 6088.50 after trading resumed overnight. The price remained below the high point of the rise that began on November 19 from 5855..

What does it mean? Elliott Wave Theory analysis sees the rise as part of a 5th-wave uptrend that is well advanced — 5th waves three degrees down to the small rise that began on December 6 from 6093.75, and 5th waves three degrees up to the much larger uptrend that began on September 6 from 5394.

The waves on the chart are labeled with an Elliott Wave number followed by a subscript in curly brackets that shows the wave’s relation, in the fractal structure of the chart, to the present wave of Intermediate degree, wave 5{0}, which began on December 26, 2018.

When the smallest of the 5th waves labeled on the chart, wave 5{-14}, is complete, it will cascade through the fractal structure, simultaneously ending each of those larger 5th waves, up to wave 5{-8}.

It will also be the end of the larger wave encompassing all of those 5th waves, a rising 3rd wave, wave 3{-7}, which began on August 7 from 5182. From that point, when the 5th waves and the 3rd wave have simultaneously ended, a large 4th-wave downward correction, wave 4{-7}, will begin.

[S&P 500 E-mini futures at 3:30 p.m., 50-minute bars, with volume]

What are the alternatives? It’s possible that the starting point of the end point of wave 4 on December 6 is one degree smaller. Under this scenario, the decline was the A wave within the preceding 4th wave, which means the rise is wave B within the corrective wave, with wave C yet to come.

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}.
• Wave 4{-13} is now underway and is in its initial subwave, wave A{-14}.

Alternative Analysis: [A version of this was moved up to Principal Analysis in the after release, placing the small-lineup as wave A{-15} within wave 4{-14} within wave 5{-12}.]

• Wave 5{-13} is now underway and is in its next-to-the-last subwave, wave 4{-14}, which in turn is in wave B{-15}.

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)

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 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

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.