3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures peaked at 5944.50 during the session, beyond the May 13 peak of 5927..

Elliott Wave Theory: The move beyond the prior high, at the end of an uptrending wave which may have broken a rule of the theory. The core question at this point is, “What happened?”

Some possibilities:

1. Wave 3 was not truly complete — and what I labeled as Wave 4 is actually part of an extended Wave 3 or a Wave 5 truncation attempt.
2. It could be that the corrective structure is taking the form of a Flat with three subwaves. — perhaps an A-B-C flat or expanded flat, where the B-wave can exceed the start of A, The internal strucutre of wave A lacks clarity, so at this point it’s hard to.
3. The movement could be a diagonal, where overlap is allowed — but diagonals have their own internal structure rules (typically 3-3-3-3-3 or 5-3-5-3-5), and Wave 4 can exceed Wave 3 only in leading or ending diagonals, not in standard impulses.

So the answer to the core question, at this point, is — “Beats me! Time for a reanalysis.” Which is what I’ll do, either on Friday or over the weekend.

And that’s one of the joys of Elliott Wave Theory: The ambiguities.

9:35 a.m. New York time

What’s happening now. The S&P 500 E-mini futures continued to to repeat the behavior of the past few days: A decline followed by a rise that bumps into the ceiling and then withdraws disappointment. Overnight, the pattern was a decline from 5904 to 5867 and then a rise into the 5890s.

What does it mean?  Elliott Wave Theory analysis sees the pattern as a shallow downward correction amid a time of great uncertainty. The correction is a 4th wave, so EWT sees the uncertainties eventually being resolved, ending the correction and beginning a uptrending 5th wave (on the chart, wave 5{-9}. The whole pattern is contained within a larger 5th wave (wave 5{-8} on the chart) that began on May 7.

The end of the future smaller 5th wave will be the end of the larger wave 5{-8}, it’s parent, wave 5{-7}, and its grandparent, 3{-6}, which will will be followed by a 4th-wave downward correction, marked 4{-6} on the chart.

[S&P 500 E-mini futures at 3:30 p.m, 60-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 on the chart are as follows.

Principal analysis: Upward correction wave 5{-2} is underway and within it is working through a nested series of initial subwaves, wave 1{-3} down to wave 1{-5}. One degree lower, rising wave 3{-6} is underway and is in its final subwave, wave 5{-7},

Within wave 5{-7}, uptrending wave 5{-8} is in its next-to-the-last stage, corrective wave 4{-9}.

Waves Now Underway

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)
• 5{-2} Minute, 4/7/2025, 4832 (up)
• S&P 500 Futures
• 1{-3} Minuette, 4/7/2025, 4832 (up)
• 1{-4} Subminuette, 4/7/2025, 4832 (up)
• 1{-5} Micro, 4/7/2025, 4832 (up)
• 3{-6} Submicro, 4/21/2025, 4832 (up)

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, May 15, 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