3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures continued to rise during the session, reaching 6519.50.

Elliott Wave Theory: Wave B within a 4th-wave downward correction is underway. Wave B has continued further beyond the starting point of the preceding A wave., 6508.75. That’s OK according to the rules of Elliott Wave Theory if the correction is taking the form of a Flat. And that’s where the ambiguity lies.

A correction is a Flat when the A-wave has three subwaves. Days ago I labeled this A wave as having three subwaves. But as is so often the case, the subwaves structure lacks clarity, and if I squint, it could be labeled as having five subwaves.

If wave A has five subwaves, then the correction is taking the form of a Zigzag. And under the rules of Elliott Wave Theory, no Zigzag can move beyond the starting point of Wave A. If it does, the analysis no longer matches the reality and must be redone.d

In some ways deciding how to label the correction — a necessity–is operating backwards, with the acts of wave B dictating to us what happened in the past, the nature of wave A. Rather than the past defining the future, the future is defining the past.

It’s like H.G. Wells’ time-travel book, proving that Elliott Wave Theory has a magnificant taste for literary excellence.

9:35 a.m. New York time.

What’s happening now. The S&P 500 E-mini futures rose from 6471 to 6506.75 overnight.

What does it mean? In terms of Elliott Wave Theory analysis, the overnight high so far is close to the August 14 peak, 6508.75, which was the starting point of a 4th-wave downward correction that is still underway.

The overnight peak is part of a rising B wave, the middle subwave of the correction. When wave B is complete, it will also be the beginning of the final subwave, wave C, which likely will carry the price down to the 6350s.

[S&P 500 E-mini futures at 3:30 p.m., 50-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
• 1{-3} Minuette, 10/13/2022, 4603 (up)
• 1{-4} Subminuette, 4/7/2025, 4832 (up)
• 3{-5} Micro, 4/21/2025, 5127.25 (up)
• 5{-6} Submicro, 8/1/2025, 6249.50 (up)
• 1{-7} Minuscule, 8/1/2025, 6349.50 (up)
• 3{-8} (unnamed), 8/5/2025, 6313.25 (up)
• 4{-9} (unnamed), 8/14/2025, 6508.75 (down)
• B{-10} (unnamed), 8/20/2025, 6162.75 (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, August 28, 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 work at www.timbovee.com