9:35 a.m. New York time
What’s happening now?
The S&P 500 E-mini futures fell overnight from 7750.25 to 7704.50, then rebounded into the 7730s. The recovery retraced part of the decline but left the broader downward movement intact.
What does it mean?
Elliott Wave Theory. Falling wave E{-5} continues, the final subwave of wave 4{-4}, an expanding triangle that began in October 2025.
Within wave E{-5}, falling wave A{-6} remains underway. The overnight rebound may mark the beginning of a rising B wave buried several degrees deep within that decline.
If the interpretation is correct, the B wave will unfold in three subwaves and will be followed by a falling C wave, which should carry the price below the low established at the end of the preceding A wave.
The rebound is still too small to confirm the B-wave interpretation. Further upward movement would strengthen that reading, while a renewed decline below 7704.50 would suggest that the preceding downward movement remains underway.
Decision Points.
7704.50: The overnight low is the immediate downside reference. A break below that level before a recognizable three-wave recovery develops would weaken the interpretation that a rising B wave has begun.
7750.25: The starting point of the overnight decline provides an initial upside reference. A recovery toward that level would strengthen the case for a corrective B wave, although it would not establish the wave’s completion.
Trading implications: The larger Elliott wave structure remains bearish. A rising B wave would be a correction within the decline, rather than evidence of a sustained bullish reversal. The preferred approach is to avoid opening new directional positions until the developing wave structure provides greater clarity.
The Chart. The chart focuses on the current declining wave E{-5} and the rising wave that preceded it, wave D{-5}.
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 E-mini futures
- 5{-3} Minuette 8/1/2025, 6239.50 (up)
- 4{-4} Subminuette 10/29/2025, 6953.75 (down)
- E{-5} Micro 10/6/2026, 7897.50 (down)
- A{-6} Submicro 10/6/2026, 7897.50 (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 pageAnalytical Methods for a rundown on where to go for information on Elliott Wave analysis.
By Tim Bovee, Portland, Oregon, October 20, 2026
Disclaimer
Tim Bovee, Private Trader tracks the analysis and trades of a private trader managing his own accounts. The content reflects my interpretation of market structure, including Elliott Wave Theory and related tools.
Nothing in this blog constitutes a recommendation to buy or sell stocks, options, or any other financial instrument, or to pursue any particular strategy. The purpose of this blog is education and entertainment.
No trader is ever 100 percent successful. Trading in stock and options markets involves risk and uncertainty. Each trader must make decisions for his or her own account and accept full responsibility for the outcomes.
Charts and tools are used to support my personal analysis. Any data displayed is illustrative of that analytical process and is not presented as a source of market data for redistribution.
All content on Tim Bovee, Private Trader byTimothy K. Boveeis licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
License
Based on work atwww.timbovee.com
