3:30 p.m. New York time

Half an hour before the closing bell. Based on what we’ve seen so far, I’ve updated the chart with the beginnings of a revised analysis. This is a tentative analysis — call it a Principal Analysis Light.

The basis of it is that a larger 4th-wave downward correction that began on December 16, 2024 from 6163.75. It is labeled wave 4{-5} on the chart. The February 19 peak was slightly above that level, and that works, of the corrective pattern has taken the form of a Flat, where Wave A has three subwaves, B has three, and C has five (3-3-5).

The revised chart:

[S&P 500 E-mini futures at 3:30 p.m., 110-minute bars, with volume]

1:05 p.m. New York time

The rest of the story. In this discussion I’ll use the wave labels as they appear on the chart. Each wave has a number, followed by a subscript in curly brackets that indicates the wave’s position in the fractal structure of the chart. The subscript is the number of levels between the wave and the Intermediate degree. The ongoing wave of Intermediate degree is wave 5{0}, which began on February 11, 2016.

At this point, there are several possible ways to view the Elliott Wave Theory chart.

The price continued to fall early in the session, eventually reaching 5994.50. That means wave 4{-9} overlapped the other corrective wave in an impulse pattern, wave 2{-7}. That’s not supposed to happen. So, another reworking of the map so that it matches the terrain.

The 6020.75 level, the end of wave 1{-7}, broke the bullish wave count that was this morning’s principal analysis.

The next significant level is 5936.50, the February 2 start of rising wave 3{-6}. If the price rebounds and moves above that level, then it’s possible that we’re looking at a Triangle correction of some sort.

If the price breaks and stays below 5936.50, then the wave 4{-5} correction never ended. That correction began on December 16, 2024.

I’ve made the minimal fix, removing the wave 5{-9} degree and restoring wave 4{-9}. For the rest, we’ll have to wait and see.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures worked its way higher after trading resumed overnight, reaching into the 6060s as it recovered a bit more from the decline that began on February 19.

What does it mean? Elliott Wave Theory labels the decline as a low-degree 4th wave downward correction. Its downward journey has three subwaves, meaning that it was the corrective structure called a Flat.

By that count, the 4th wave has ended and rising wave 5 has begun and most likely will carry the price back up into the 6160s and perhaps much higher.

That’s the principal analysis. However, there is another scenario…

[S&P 500 E-mini futures at 1:05 p.m., 110-minute bars, with volume]

What is the alternative? The 4th-wave downward correction may have ended at the February 20 low, 6102.75, as the principal analysis has it. Or that might have only been the end of the first subwave, wave A, within the correction. I’ve chosen the 5th-wave scenario as my principal analysis, and the ongoing 4th wave as my alternative analysis.

What does Elliott Wave Theory say? Here are the waves that underlie the morning’s analyses as they appeared on the chart. See the new chart, above, in the 3:30 p.m. post, along with explanation. The following analyses waves are no longer valid but they are being retained today to allow for comparison.

Principal Analysis:

• Wave 4{-9}, a downward correction, ended at the February 21 low, and rising wave 5{-9} now underway. Both waves are subwaves of wave 1{-8}, which in turn is a subwave of wave 3{-7}.

Alternative Analysis:

• Wave A{-10}, the first subwave within wave 4{-9}, ended on February 20 and rising wave B{-10} 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. This list has been revised to reflect the revised Principal Analysis.

• 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, 2/11/2016, 1810.10 (up)
• 3{-1} Minor, 3/23/2020, 2191.36 (up)
• 3{-2} Minute, 10/13/2022, 3491.58 (up)
• S&P 500 Futures
• 5{-3} Minuette, 4/18/2024, 4963.50 (up)
• 3{-4} Subminuette, 8/7/2024, 5182 (up)
• 5{-5} Micro, 1/13/2025, 5809 (up)
• C{-6} Submicro, 2/19/2025, 6166.60 (down)

Reading the chart. Price movements — waves – – in Elliott Wave Theory 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 24, 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