3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures continued to rise during he session, coming within 75 cents of a 100% Fibonacci retracement Elliott Wave Theory has a firm rule that a 2nd wave never moves beyond the start of the preceding 1st wave, at 3848.50. If it does, then it isn’t a 2nd wave that began on August 1. Something else is going on.

There are some hedges that possibly are legitimate way to avoid triggering the, The futures at hand are a derivative S&P 500 index. Moreover, it moves in 25-cent increments. So if the price moves one cent above the 100% retracement level, does that really count as indisputably above? Or is it a tiny rounding error?

Moreover, it’s possible, if I squint real hard, to see the declining 1st wave, the initial subwave of wave A, to actually be waves A, B and C, meaning that the 2nd wave downward correction ended on August 1, and wave 3 began from that point.

At this point, we don’t know for sure and are relying on 20-20 hindsight.

If it beaks above and continues to rise for some distance, then the downward correction ended on August 1 and an uptrending 1st wave may well be underway.

If the price briefly breaks a short distance — 12 cents or less, maybe? — above the start of the preceding 1st wave and then retreats, that lends credence wave B having just ended and wave C having begun, both within wave 2.

9:35 a.m. New York time.

What’s happening now. The S&P 500 E-mini futures traded sideways between the 6390s and the 6410s until an hour before the opening bell, when the release of the Consumer Price Index sent the price on a 7-minute rise into the 6440s. The CPI-U on average rose 0.2 each month, with a high of 0.5 in January and a low of -0.1 in March. When the session began the futures were trading in the 6420s.

What does it mean? In Elliott Wave Theory, the rise was the last leg of the 5th and final subwave within wave A, the first subwave of a 2nd-wave upward correction that began on August 1.

All of this is part of a downward correction two degrees larger that began on July 31 and which is working through its A wave.

When the smaller 2nd wave is complete, a downtrending 3rd wave will follow, then a 4th-wave upward correction and a downtrendng 5th-wave that wil complete the internal structure of the larger 2nd wave and mark the beginning of a rising 3rd wave of the same degree.

[S&P 500 E-mini futures at 3:30 p.m., 30-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)
• 1{-2} Minute, 7/31/2025, 6468.50 (down)
• S&P 500 Futures
• 2{-3} Minuette, 7/31/2025, 6468.50 (down)
• A{-4} Subminuette, 7/31/2025, 6468.50 (down)
• 2{-5} Micro, 8/1/2025, 6239.50 (up)
• A{-6} Submicro, 8/1/2020, 6239.50 (up)
• 5{-7} Submicro, 8/11/2025 6387.50 (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, August 12, 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.