3:30 p.m. New York time

Half an hour before the closing bell. That smaller rising B-wave that appeared to have ended on January 28 now appears to be ongoing. The wave reversed from its decline and reached into the 6110s, slightly above the top attained earlier in the week.

Otherwise, no change. The 4th-wave upward correction that began on January 13 continues and is in its middle wave, a declining B wave that began on January 24.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose after yesterday’s session close, from the 6060s to slilghtly above 6100, and then withdrew slightly.

What does it mean? The price remained slightly below the January 28 peak, 6111.50, which Elliiott Wav Theory analysis sees as the wave of wave B and the beginning of declining wave C within a larger declining B-wave, one degree higher with a 4th-wave rising correction that began on January 13.

So at the daily level we’re dealing with two corrections, a smaller declining C wave, labeleld C{-18} subscript on the chart, and a declining larger B wave, labeled B{-17}. The subscripts, in curly brackets, are the number of degrees the wave is from Intermediate degree, presently wave 5{0}, which began in December 2018.

The end of the small declining C wave will be the end of the larger declining B wave and the start of the larger rising C wave, which, when complete, will also be the end of the rising 4th-wave correction and the start of a 5th-wave decline, wave 5{-16}, which likely will carry the price down below 6000, perhaps siginificantly so. Or perhaps not. A 5th wave tends to be quirky.

Also, sometimes corrections take a complex form. Normally they have three subwaves — A, B and C — and that’s the end of the correction. But from time to time, wave C is followed by a connector X wave, and then another three-wave corrective pattern, and occasionally by a second connevctor and a third corrective pattern.

Complex corrections are unpredivctable. We know them when we see them.

[S&P 500 E-mini futures at 3:30 p.m., 75-minute bars, with volume]

What are the alternatives? This is word-for-word from yesterday, and may be with us for a while longer. What I’ve labeled as wave A{-18} may in fact turn out to be a subwave of that wave, one degree lower.. If I squint real hard, wave A{-18} appears to have five subwaves, making it the Zig-zag type of correction. But the rising corrective wavesw ithin it are extremely small, so they don’t really match the size of the parent wave. So for now I’m sticking with the chart as labeled. Time will tell if that was the correct choice.

What does Elliott wave theory say? Here are the waves that underly the analyses, updated with the today’s reanalysis.

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 initial subwave, wave 1{-9}, as are waves 1{-10}, 1{-11}, 1{-12}, and 1{-13}.
• Wave 1{-14}, an upward correction and is in its first subwave, wave 3{-15}.
• Wave 3{-15] is in its second subwave, rising wave 4{-16}, an upward correction
• Wave 4{-16} is in its middle subwave, descendng wave B{-17}, which is in its middle subwave, rising wave B{-18}

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. (Updated with today’s reanalysis.)

• 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)
• 1{-14} (unnamed), 1/13/2025, 5809.25 (down)
• 3{-15} (unnamed), 1/13/2025, 5809.25 (down)
• 4{-16} (unnamed), 1/13/2025, 5809.25 (up)
• B{-17} (unnamed), 1/24/2025, 6162.25 (down)
• B{-18} (unnamed), 1/27/2025, 5948 (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, January 30, 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.