3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures continued to fall during the session, albeit it at a slower rate. The low as of this filing is 6239.50.

Elliott Wave Theory: Wave 4{-15} has moved below the starting point of wave 3{-15} from 6288.25 on July 16.

One firm rule of Elliott is that a 4th wave is that a 4th waves never moves below the preceding 1st wave’s beginning. Wave 1{-15} began on July 16 from 6241. So wave 4{-15} has become a scofflaw, and fixing that problem will be part of the weekend’s reanalysis of the chart.

9:35 a.m. New York time.

What’s happening now. The S&P 500 E-mini futures continued to fall overnight, reaching into the 6280s.

What does it mean? Elliott Wave Theory suggests the possibility that wave A, the first subwave of the declining 4th wave that began on July 31, ended at that low and that wave B has begun. Suggests, but it’s not a certainty. Anyone who works with charts has been stung by a false end-of-wave signal when a declining wave is bottom fishing.

So until we have a greater rise to confirm that wave B underway, I’m retaining the A-wave-underway scenario as the principal analysis, and adding the B-wave-underway scenario as an alternative analysis.

Looking at things more broadly, I think it’s time to perform a reanalysis of the waves that led us to the July 31 peak, which is my normal cautionary practice after a major turning point. It sometimes happens that the degrees get muddled as a larger wave progresses. While the waves themselves are clear, the degrees always run the risk of ambiguity in Elliott Wave Theory. A project for the weekend.

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

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, 4/24/2025, 5260 (up)
• 5{-7} Minuscule, 4/25/2025, 5550 (up)
• 5{-8} (unnamed), 5/7/2025, 5596 (up)
• 5{-9} (unnamed), 5/23/2025, 5756.50 (up)
• 5{-10} (unnamed), 6/22/2025, 5959 (up)
• 5{-11} (unnamed), 6/27/2025, 6183.25 (up)
• 3{-12} (unnamed), 6/30/2025, 6224 (up)
• 5{-13} (unnamed), 7/14/2025, 6529.75 (up)
• 5{-14} (unnamed), 7/16/2025, 6241 (up)
• 4{-15} (unnamed), 7/31/2025, 6468.50 (down)
• A{-16} (unnamed}, 7/31/2025, 6488.50 (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, August 1, 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.

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

License

Based on a work at www.timbovee.com.