U.S. markets are closed on Monday in honor of the Martin Luther King holiday and will reopen Tuesday on the normal schedule.

Where to go to learn. From time time I run into people who, when they find out about my trading and market analysis, they immediately ask, “Gotta tip?”: Which of course is a fine old custom in the world of the markets. My reply, always, is “Learn Elliott Wave Theory. Below, a new sections, appropriate named “Books! Books! Books!”, is a list of books that in my opinion deserve a place on your bookshelf. They are prominent on mine.

7:45 p.m. New York time

Learning Elliott Wave Theory: Books. From time time I run into people who, when they find out about my trading and market analysis, they immediately ask, “Gotta tip?”: Which of course is a fine old custom in the world of the markets. My reply, always, is “Learn Elliott Wave Theory. And my web site where I analyze the market every day it’s open: http://www.tbovee.com”.

Here are the best books I’ve found for learning EWT.

• The Elliott Wave Principle, by Charles Frost and Robert Prechter. This was the book that, along with Prechter’s company, Elliott Wave International, brought the 1930s analytical tool back to prominence.
• Visual Guide to Elliott Wave Trading, by Wayne Gorman and Jeffrey Kennedy. The authors work at Elliott Wave Internltional, Lots of examples, The book is published by Bloomberg, which, I think, gives it some clout.
• Mastering Elliott Wave, by Glenn Neely. The author is an Elliott Wave analyst who has discovered new rules that weren’t i the original Elliott Wave Theory. An expensive book but a good one,

And two short, cheap book for people who need to learn Elliott quickly,

• Elliott Waves Made Simple, by Steve Sinclair. The basics.
• Secrets on Fibonacci Trading, by Frank Miller, who lays out the basics of Fibonacci Retracement Theory, which many Elliott Wave Theoreticians use as an adjunct.

3:30 p.m New York time

Half an hour before the closing bell. The S&P 500 futures reached a high during the session of 6051.50 and then drifted back to the 6130s.

The final subwave within wave C, the closing wave of the wave 2 upward correction continues.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures resumed its rise overnight, travelling from the 5960s to the 6020s.

What does it mean? Elliott Wave Theory sees the rise, which began on January 15 from 5961.75, as the final subwave — wave 5 — within the initial subwave — wave A — within the 2nd-wave upward correction that began on January 13 from 5809.25.

The World Turned Upside Down. Bigger picture: The S&P 500 on December 16, 2024 ended a 3rd-wave uptrend that began on August of last year and began a downtrend. From that point onward, uptrendng trending waves — the familiar waves 1 through 5 — have been downtrending, and the downward corrections — waves A through C — have become upward corrections. That switch in the norm will gradually change, beginning with the smaller degrees.

What’s next? Within the 2nd-wave upward correction, the rising A wave is nearings its end and will be followed by a falliing B wave and then a rising C wave, which in most cases will end the 2nd wave. A 3rd-wave downtrend will follow, carrying the price a significant distance below the end of the previous 1st wave, 5809.25.

[S&P 500 E-mini futures at 3:30 p.m., 55-minute bars, with volume]

What are the alternatives? None at present. They will develop.

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 4{-7} is in its initial; subwave, which is uptrending wave A{-8}, if wave 4{-7} is a Flat structure, with three subwaves, or wave 1{-8} if it is a Zigzag structure, with five subwaves. (I’ll assume Flat as the list continues, since that’s more common within 4th waves)
• Wave A{-8} is in its intial subwave, wave 1{-9}, as are waves 1{-10}, 1{-11}, 1{-12}, and 1{-13}.
• Wave 2{-14}, an upward correction and is in its first subwave, wave A{-15}.
• Wave A{-15] is in its final subwave, wave 5{-16}.

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)
• 4{-7} Minuscule, 12/16/2024, 6163.75 (down)
• A{-8} (unnamed), 12/16/2024, 6163.75 (down)
• 1{-9} (unnamed), 12/16/2024, 6163.75 (down)
• 1{-10} (unnamed), 12/16/2024, 6163.75 (down)
• 1{-11} (unnamed), 12/16/2024, 6163.75 (down)
• 1{-12} (unnamed), 12/16/2024, 6163.75 (down)
• 1{-13} (unnamed), 12/16/2024, 6163.75 (down)
• 2{-14} (unnamed), 1/13/2025, 5809.25 (up)
• A{-15} (unnamed), 1/13/2025, 5809.25 (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.

Learning Elliott Wave Theory: Books. From time time I run into people who, when they find out about my trading and market analysis, they immediately ask, “Gotta tip?”: Which of course is a fine old custom in the world of the markets. My reply, always, is “Learn Elliott Wave Theory. And my web site where I analyze the market every day it’s open: http://www.tbovee.com”.

Here are the best books I’ve found for learning EWT.

• The Elliott Wave Principle, by Charles Frost and Robert Prechter. This was the book that, along with Prechter’s company, Elliott Wave International, brought the 1930s analytical tool back to prominence.
• Visual Guide to Elliott Wave Trading, by Wayne Gorman and Jeffrey Kennedy. The authors work at Elliott Wave Internltional, Lots of examples, The book is published by Bloomberg, which, I think, gives it some clout.
• Mastering Elliott Wave, by Glenn Neely. The author is an Elliott Wave analyst who has discovered new rules that weren’t i the original Elliott Wave Theory. An expensive book but a good one,

And two short, cheap book for people who need to learn Elliott quickly,

• Elliott Waves Made Simple, by Steve Sinclair. The basics.
• Secrets on Fibonacci Trading, by Frank Miller, who lays out the basics of Fibonacci Retracement Theory, which many Elliott Wave Theoreticians use as an adjunct.

By Tim Bovee, Portland, Oregon, January 17, 2025

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.