Protecting against inflation. Friday was a market holiday in the United States, a fact had forgotten into I jumped out of bed at 5 a.m. Portland, Oregon time, prepared to analyze, only to discover that no one was trading. So I wrote an essay, called “About Value“, that explained my thinking about how to protect my funds from being devalued through inflation.

One result of that holiday writing is that I’m adding gold to my daily analyses, gold being the premier hedge to inflation. It will named Trader’s Notebook: Gold, and will focus on the the gold futures (symbol: GC). My long-running S&P 500 index analyses, focusing on the S&P500 E-mini futures (symbol: ES), has been renamed Trader’s Notebook: S&P 500. Look for the first edition during the session.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures continued to decline, reaching into the 5120s, as the middle subwave, wave 3, of the downtrending 5th wave that began on April 17 from 5371.25 continues.

On the chart, the waves labeled wave 3{-13} within downtrending wave 5{-12}.

Wave 3{-13} will be followed by an upward correcrion, wave 4{-13}, and then another downtrending wave 5{-13}, which bring wave 5{-12} to a close, along with its parent, wave C{-11}, and its grandparent, wave B{-10}, all declining waves.

Each will be followed by a rising wave.

9:35 a.m. New York time

What’s happening now. The S&P 500 E-mini futures declined after trading resumed overnight, from 5306.75 down to the 5230s, and then rose again.

What does it mean? The decline is a downtrending 5th wave that began on April 17 from 5371.25. The 5th wave is a subwave of a C wave that began on April 15 from 5485. Encompassing it all is a 2nd-wave upward correction that began on April 10 from 5146.75, subwave of a larger downtrending 5th wave that began on April 9 from 5528.75.

[S&P 500 E-mini futures at 3:30 p.m, 25-minute bars, with volume]

 Elliott Wave Theory wave labels. 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. Downtrending wave 5{-8} is underway, a subwave of wave C{-7}, also declining, which in turn is a subwave of declining wave C{-6}, with both C waves encompassed by declining wave 4{-5}, which began on December 16, 2024.

Within wave 5{-8}, the second subwave, rising wave 2{-9} is underway and is in declining wave B{-10}.

Wave B{-10} is in its final subwave, wave C{-11}, which in turn is in its final subwave, wave 5{-12}.

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, 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)
• 5{-8} (no name), 3/9/2025, 5528.75 (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 21, 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