3:30 p.m. New York time

Half an hour before the cosing bell. The S&P 500 futures continued to fall during the session, reaching a low of 5107.50 as the closing bell approached.

Elliott Wave Theory. The present decline is a downtrending 3rd wave that began from 5773.25 on April 2, shortly before President Tump announced heavy tariffs on goods made in a number of countries around the world.

So far the 3rd wave has fallen by 11.5%, which is about a third of the length of the Covid-19 Pandemic Crash of 2020.

Roll back to the 2008 crash that announceed the Great Recession. The S&P 500 index lost about half of its value.

So what we’ve experienced yesterday and today is painful but not unusual. Also note: The ongoing 3rd wave that encompasses the market’s tariff response began to fall before the president’s announcement. In the world of Elliott Wave Theory, we knew long before that we would have a decline that tends to be on the long side. Since Elliott Waves track the public mood, it would be fair to say that the markets were poised for a fall before president Trump had figured out what he was going to say on April 2.

9:35 a.m. New York time

What’s happening now. The S&P 500 E-mini futures continued to fall overnight, reaching 5210.50 and then rising back into the 5310s as new employment data was released and the opening bell approached.

[S&P 500 E-mini futures at 3:30 p.m, 20-minute bars, with volume]

What does it mean? Elliott Wave Theory sees the decline that began on April 2 as the middle subwave, wave 3, within the final subwave, wave C, which began on March 25 which in turn is the final subwave, also wave C, that began on February 19. The entire structure exists with a 4th-wave downward correction that began on December 16, 2024.

The 3rd wave that began on April coincided with President Trump’s announcement of a wide range of new tariffs. The decline has been characterized as the worst one-day crash since the Covid-19 pandemic crash of 2020. But that’s a bit misleading. First, the two aren’t comparable in magnitude. The Covid crash produced a 33.5% loss; the Tariffs Crash, a 12.3% loss so far.

The long-term S&P 500 index chart below, running from February 2016 to the present, tells the tale.

[S&P 500 E-mini futures at 9:33 a.m, weekluy bars, with volume]

What does Elliott Wave Theory say? Each wave listed on the charts has two components: A wave number, and a subscript in curly brackets that place the wave’s position in the fractal strucutre in relationship to Intermediate degree. The present Intermediate degree, wave 5{0}, began its rise on February 11, 2016 from 1810.10 and is still underway.

The waves referred to above are as follows. Declining wave 3{-9} is underway, a subwave of wave 3{-8}, also declining, which in turn is a subwave of declining wave C{-7}.

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 to match the 7:08 p.m. 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)
• 4{-5} Micro, 12/16/2024, 6163.75 (down)
• C{-6} Submicro, 2/19/2025, 6166.50 (down)
• C{-7} Minuscule, 3/25/2025, 5835 (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, April 4, 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