Holiday note: U.S. markets will be closed on Monday, February 17, for Presidents Day. Trading will resume on Tuesday.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures dithered in a narrow range, from the 6120s to the 6140s, in a session that went nowhere. This morning’s analysis stands unchanged, and the accompanying ambiguity, unresolved.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight, to 6146.75, and then declined into the 6120s.

What does it mean? Elliott Wave Theory: The rise, wave C within a larger B wave, came within $1 of the end of the preceding A wave and remained below the December 16, 2024 peak, 6163.75.

No rules of Elliott Wave Theory were broken. There are other reasons to think that the alternative scenario, discussed below in the “What are the alternatives?” section, is better fit. The man reason is that the as labelled is disproportionate to other waves of the same degree within the fractal structure of the chart.

it’s all very subjective, and I’m inclined at present to stick the principal analysis, while keeping a close watch for price patterns that would push the decision in favor of the alternative.

At present: Declining ave 3{-19} within falling wave C{-18} within falling wave B{-17}, the middle subwave of three within the 4th-wave upward correction that began on January 13.

I’ve retained the Fibonacci ladder on the chart. The overnight peak moved below the 23.6% Fibonacci retracement level. If the principal analysis is correct, the 3rd wave should return to its decline, perhaps reaching into the 5900s. If the alternative analysis is correct, the price will turn, breaking above 6147.75, the peak of wave B.

If it breaks above 6163.75, the December 24, 2024 peak, then all of the analysis from that day forward will require reanalysis to match the new reality.

[S&P 500 E-mini futures at 3:30 p.m., 105-minute bars, with volume]

What are the alternatives? Should the 1st-wave endpoint, wave 1{-19}, on February 2 instead be labeled as the parent wave C{-18} endpoint, bringing to an end the B{-17} wave that is one degree higher in the fractal chain of the chart and the beginning of a rising wave C{-17wave. All of this is happening within the wave 4{-16} upward correction that began on January 13. The rising C wave, if it is in fact underway, the final subwave of that correction.

If the price moves above 6123.25, the high of rising wave 2{-19} in the principal analysis, then I would switch to an alternative scenario: Wave B ended on February 2.

What does Elliott wave theory say? Here are the waves that underlie 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 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, descending wave B{-17}, which is in its middle subwave, rising wave B{-18}
• Declining wave C{-19}, the final subwave of wave B{-18}, has begun.

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)
• C{-18} (unnamed), 1/31/2025, 6147.75 (down)
• B{-18} (unnamed), 1/27/2025, 5948 (up)
• C{-19} (unnamed), 2/7/2025, 5935.5 (down)

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, February 14, 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