SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 E-mini futures fell below the September 15 low of 4425.25, so far reaching 4416.25. The decline altered the meaning of the September 15 high of 4478.50 — it’s the end of a rather smallish wave 2 of Bitsy degree and the beginning of the wave 3 decline to new lows. I’ll be looking at that portion of the chart over the weekend and on Monday to try to understand whether there’s a more likely count; the truncation of what I’ve called wave 2 is somewhat inelegant. I’ve updated the near-term chart below.

1:40 p.m. New York time

My trades. This week marked the end of my trading in options expiring October 15. I had positions in BABA and FXI, and exited both for a profit.

Here’s what lies ahead. The next option I’ll trade will expire on November 19, 2021, with expiration day — the day I exit positions no matter how small the profit — coming on October 29. The entry period under my rules stretches from September 28 through October 12, with the optimal entry date being October 5.

And so, I have an 11-day vacation from options, and then I’ll start looking for prospects.

9:50 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continue their upward correction within a downtrend that began on September 3.

What does it mean? The correction will remain below the September 3 high of 4549.50 on the futures, 4545.85 on the index. When complete, the downtrend will continue.

What’s the alternative? If the rise exceeds the September 3 high, then the uptrend that began May 19, and indeed much earlier, is still underway, and the decline since September 3 is a downward correction within that long-running uptrend.

The Chart. On the top, a near-term chart of the futures since mid-August. On the bottom, a long-term chart of the index since late 2018.

[S&P 500 E-mini futures at 5 p.m., 70-minute bars, with volume]
[S&P 500 index at 9:56 a.m., two-day bars]

What does Elliott wave theory say? In the near-term, there is no change to my analysis posted yesterday, to which I refer you. The futures price has remained above 4425.25 — the low of September 14 — and below the high set on Wednesday, 4478.15.

For the longer term, the S&P 500 index has been tracing an expanding diagonal triangle that began on December 26, 2018. The triangle is a 5th wave of Intermediate degree. Such structures have five internal waves, and at present wave 3 of Minor degree has been under way since February 23, 2020, the low point of the early-pandemic crash. When wave 3 is complete, the price will spend a few years dropping down to the lower boundary of the triangle, which now stands a bit above 2,000 but which will continue to decline, as the upper and lower boundaries continue to move further apart of one another. Minor 3 internally is within wave 3 of Minute degree.

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, 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, September 17, 2021

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.

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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.

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 E-mini futures ended their decline at 4433.25, eight points above the September 14 low, and then resumed their rise in an upward correction, wave A of Subbitsy degree within wave 4 of Bitsy degree, that began on September 14. No change in the analysis. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose in overnight trading, reaching 4478.15, and then reversed, staying well above Tuesday’s low.

What does it mean? By my count Tuesday’s low, 4425.25, marks the end of the first leg of the decline that began September 3, from 4549.50. The subsequent rise is the beginning of an upward correction that will remain below the September 3 peak, although it may well approach it quite closely.

What’s the alternative? There are two. 1) The first leg of the decline from September 3 is still underway. This analysis is correct if the price falls below 4425.25 on the futures, 4435.46 on the index.

2) The entire decline is a correction within a still ongoing rise that began May 19. This analysis is correct if the price rises above 4549.50 on the futures, 4545.85 on the index.

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

What does Elliott wave theory say? By my principal count, wave 1 of Bitsy degree (subscript {-9}) ended with Tuesday’s low, having completed a five-wave decline, and the subsequent rise is wave 2 of Bitsy degree. Within Bitsy 2, wave A of Subbitsy degree is now underway. Second waves often retrace much of the preceding 1st wave, bringing renewed optimism to traders. However, they remain below the start of the preceding 1st wave, and in the end all hopes are dashed when the correction ends and wave 3 resumes the decline (in this case), brining the price to new lows. This is all happening within wave 4 of Micro degree, which began May 19 and ended at the September 3 peak.

Under the first alternate analysis, Tuesday’s low is not yet the end of wave 1 of Bitsy degree, and it still has a bit more distance downward to go. After that, the 2nd wave begins, as described in the principal anaysis.

Under the second alternate anaysis, wave 3 of Micro degree didn’t end on September 3 and is still underway. The decline that began on that date is a smaller correction within a still rising wave 3 Micro degree.

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, 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, September 16, 2021

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
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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.

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 rose nearly 50 points during the day, from yesterday’s low of 4425.25. No change in the analysis. I’ve updated the chart.

10 a.m. New York time

My trades. I’ve exited by short bear call spread options position on FXI and have updated the entry analysis with results.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures traded in a narrow range overnight in a low level sideways correction.

What does it mean? The downtrend that began on September 3 continues.

What’s the alternative? The September 3 high marked a turning point within the rise that began May 19, which is still underway.

On the chart. I’ve marked the low-degree waves within the decline that began September 3 as being of Subbitsy degree (with a {-10} subscript). I’ve based that decision on the number of days it takes each wave to reach completion. However, since the decline so far lacks the context of parent waves of larger degree, I’ve have little confidence that Subbitsy is correct. I’ll change my degree label if events should prove it to be too small a degree (I doubt that it will prove too large).

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

What does Elliott wave theory say? The decline is wave 5 of Subbitsy degree within wave 1 of Bitsy degree within a series of 1st waves of progressively higher degree, up two steps to Minuscule degree. Encompassing them all is wave A of Submicro degree, the first wave within its parent, wave 4 of Micro degree, a downward correction.

Wave 4 of Micro degree will be followed by a 5th wave to the upside that will approach the upper boundary of the price channel, which is based on the Micro degree’s parent, wave 5 of Subminuette degree.

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, 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, September 15, 2021

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
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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.

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 E-mini futures rose slightly during the day and then resumed its downward course, reaching new lows. No change in the analysis. I’ve updated the chart.

11:35 a.m. New York time

My positions. I have exited my bear call options spread position on BABA and updated the entry analysis with results.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures in overnight trading stayed above the low of 4434.50 set late in yesterday’s session.

What does it mean? The early steps in a downward correction of the rise that began May 19 from 4059.50 on the index continues. The preceding uptrend peaked on September 3.

What’s the alternative? A correction within the rise that began on May 19 is still underway. The September 3 peak was a turning point within that larger rise.

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

What does Elliott wave theory say? Under my principal analysis, wave 3 of Micro degree, which began on May 19, peaked on September 3, and wave 4 of Micro degree is now underway.

Under my alternate analysis, wave 3 of Micro degree is still underway, with the decline since September 3 being a correction within that wave. Wave 4 still lies in the future.

A price rise above the September 3 peak, 4549.50 on the futures and 4545.85 on the index, would mean that the alternate count is correct: wave 3 of Micro degree is not yet complete. Such an event would invalidate my present principal analysis and would promote the alternate count to principal count.

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, 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, September 14, 2021

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
Creative Commons 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.

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. TheS&P 500 made a small upward correction from this morning’s low and then pressed downward again, reaching 4434.50 so far. The rapid resumption of the downward movement adds additional weight in favor of my principal analysis, that the 3rd wave of Micro degree peaked on September 3, and what follows has been a 4th wave correction within wave 5 of Subminuette degree, one level higher. No change in the analysis. I’ve updated the chart.

10:20 a.m. New York time

What’s happening now? The S&P 500 fell in early morning trading, reaching a new low of 4446.50 and then rising again as the opening bell approached.

What does it mean? My principal analysis would identify the peak of September 3, at 4549.50, as the end of the rise that began on May 19 and the beginning of a decline.

What’s the alternative? Another analysis, one that I’ve preferred up to now, sees the decline from September 3 as an expanding triangle in a rise that began on August 31.

The chart. I’ve reworked the labeling to show the first, principal analysis. For a view of the now-alternative analysis, see Friday’s chart.

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

What does Elliott wave theory say? I’ve promoted the former alternative analysis to principal analysis for two reasons: 1) The decline from September 3 shows a clear five-wave pattern. If it were part of an expanding triangle, it would be three waves, and 2) the power of the downside suggests a decline rather than a 4th-wave triangle, which would be more measured in either direction.

It is possible that the alternative analysis will prove to be correct. It seems to me that the preponderance of evidence favors the principal analysis.

And what sort of decline are we seeing?

In prior analysis I’ve described a scenario in which the end of wave 5 of Subbitsy degree marks the end of a series of 5th waves up four levels to Submicro degree, and the end of wave 3 of Micro degree, one level up. In my principal analysis, the high of September 3 was the end of wave 3 of Submicro degree, triggering all of the endings up the fractal ladder. This is all happening within wave 5 of Subminuette degree.

Wave 3 of Submicro degree began on May 19, and its end is the start of Submicro wave 4, now underway. As a 4th wave it is more likely to trace a Flat pattern. Submicro 3 began from around 4060, and the endpoint was around 4550, a distance of 490 points. A Fibonacci 38.6% retracement — not uncommon in 4th waves — would move the price down to the 4360s, about 100 points below where it is today.

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, 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, September 13, 2021

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
Creative Commons 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.

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 continued to fall during the day, reversing and then falling back to a still lower level, touching the lower boundary of the expanding triangle. No change in the analysis. I’ve updated the chart.

10 a.m. New York time

What’s happening now? Three hours after yesterday’s closing bell, the S&P 500 E-mini futures dropped to a new low, 4479.25, pushing down the lower boundary of an expanding triangle (marked in red on the chart) that began on August 31. This has happened repeatedly in recent days. What differs this time is that the price drop touched the lower boundary of the price channel of the rise that began March 4 (marked in blue). In theory this strengthens the idea that the series of lower lows is over. However, prices routinely pierce the boundaries of price channels, so nothing is guaranteed. It does signify that the end is near.

What does it mean? As with the past lower lows on the triangle boundary, my principal analysis has marked the low as the end of the decline that began September 3 and the beginning of a new rise back to the upper boundary of the triangle.

What’s the alternative? A new lower low means that the decline is still underway.

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

What does Elliott wave theory say? First micro, then macro. At the small degrees, the low from last night marks the end of wave C within wave 4 of Subbitsy degree, and the beginning of wave D, which will carry the price back to the upper boundary of the expanding triangle (red on the chart), which is presently around 4560. Expanding triangles have five waves internally, so the wave E that follows will bring the price back down to the triangle’s lower boundary, ending the Subbitsy wave 4. Since the lower boundary moves further down each day, wave E will travel further than the preceding wave D to meet its end.

At the larger degrees, the rise since March 4, wave 5 of Minuette degree has been encompassed by a price channel marked in blue on the chart. The end of Minuette wave 5 will also mark the end of 5th waves of increasing degree all the way up to the Supercycle level, which is a very big deal indeed, since it will mark the start of a downtrend of epic proportions.

From small to large, with subscripts:

  • Wave 4 of Subbitsy degree {-10} (the expanding triangle, in red), when complete,
  • will mark the start ofWave 5 of Bitsy degree {-9} within
  • within wave 5 of Subminuscule degree {-8}
  • within wave 5 of Minuscule degree {-7}
  • within wave 5 of Submicro degree {-6}
  • within wave 3 of Micro degree {-5}, which will be followed by a correction, wave 4 of Micro degree, and then a 5th wave pushing up to mark the end of
  • the parent wave, 5 of Subminuette {-4} degree
  • within wave 5 of Minuette degree {-3} (the price channel, in blue)
  • within wave 5 of Minute {-2} degree
  • within wave 3 of Minor degree {-1}, whose completion will be followed by a signifiant 4th wave correction and then a 5th wave movement to higher highs,
  • which will complete wave 5 of Intermediate degree {no subscript}
  • within wave 5 of Primary degree {+1}
  • within wave 5 of Cycle degree {+2}
  • within wave 5 of Supercycle degree {+3}, which began in 1932.

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, 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, September 10, 2021

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
Creative Commons 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.

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 ended its rise early in the trading day and then took back much of that distance, while remaining above the overnight low of 4485.50 — so far. No change in my analysis, except to reemphasize the possibility that the price will move to a new low, requiring that the endpoint of wave C be repositioned. I’ve updated the chart.

10 a.m. New York time

What’s happening now? Same song different verse. The S&P 500 E-mini futures declined a few points lower in overnight trading, pushing the lower boundary of the expanding triangle pattern lower, and then reversed to the upside. (The triangle is marked in red on the chart.)

What does it mean? The reversal brought the price above the preceding downward reversal for the first time three days, strengthening the likelihood that the 4th leg of the triangle was underway. I expect it to reach the area of the upper boundary of the triangle, presently around 4960. The decline that ended overnight brought the price close to the lower boundary of the price channel of the rise that began March 4 (marked i blue on the chart).

What’s the alternative? It’s possible that the price will reverse and move still lower, meaning that the uptrending 4th leg of the triangle has not yet begun.

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

What does Elliott wave theory say? The expanding triangle, which began August 31, will have five waves. The first three — A to the downside, B upside and C downside — are complete, according to my principle analysis. Uptrending wave D is now underway. The triangle in its entirely is wave 4 of Subbitsy degree, a downward correction that will be followed by an upward push wave 5 of Subbitsy degree. The end of Subbitsy 5 will also mark the end of a series of 5th waves of increasingly higher degree, up four levels to Submicro degree, which in turn will mark the end of the parent, wave 3 of Submicro degree. The following wave at that degree will be a 4th wave correction.

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, we can judge that similarity of structure only after the fact.

Under the alternative analysis, wave C within wave 4 of Subbitsy degree is still underway, and wave D with all of its implications lies in the future. A move to a lower low, below 4485.50, would mean that the alternative analysis is correct.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, September 9, 2021

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
Creative Commons 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.

Bitcoin Analysis

9:05 a.m. New York time

What’s happening now? Bitcoin ended the first leg of an upward correction and has now begun the downward second leg.

What does it mean? I expect the present decline to remain above the June 22 low of 28,800 and to be followed by a significant rise in the third leg of the correction.

What’s the alternative? It’s possible that the September 6 peak was the end of the correction and that the downtrend that began on April 14 has resumed. If that’s the case, then I expect significant new lows.

[Bitcoin futures at 9:04 a.m., 5-hour bars]

What does Elliott wave theory say? The September 6 peak marked the end of wave A of Submicro degree within wave 2 of Micro degree, an upward correction within wave 1 of Subminuette degree, the early steps in a major downtrend that began on April 14 with the end of a series of 5th waves of increasingly higher degree, up to Minor degree.

The decline after Submicro wave A is wave B, the middle wave in a three-wave corrective pattern. It will be followed by Submicro C, whose completion will end Micro 2 upward correction and begin wave 3 of Micro degree, which will carry the price to significant new lows.

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, 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, September 8, 2021

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
Creative Commons 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.

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The price hit the lower boundary of the expanding triangle that began on August 31, pushing it lower, and then reversed. I’ve marked the chart with a principal analysis that says that the new low, 4492, is the end of wave C and the subsequent rise is wave D. If the price moves below 4492, then wave C is still underway. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures declined sharply in overnight trading, reaching a low of 4497 before reversing. The decline redefined downward the lower boundary of the expanding triangle that began on August 31.

What does it mean? The overnight low marked the end of the third leg of the triangle and the beginning of the fourth leg, which will carry the price into the region of the upper boundary, which is present around 4555. It will be followed by a decline back to the lower boundary, the 5th and final leg of the triangle. After that end of the correction, the price will rise to new highs as the uptrend resumes.

What’s the alternative? The third leg might not be finished, and in that case, the price will reverse again and push lower, again redefining the triangle’s lower boundary.

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

What does Elliott wave theory say? The expanding triangle’s boundaries — the price channel — are defined by drawing lines connecting the peaks for the upper boundary and the lows for the lower one. The upper boundary connects the beginnings of waves A and C. Those waves are complete and the upper boundary won’t change. The lower boundary connects the end of wave A and the end of wave C. As we learned last night, wave C was not yet complete at yesterday’s closing bell; the price pushed lower, as did the end of wave C and the more recent definition price of the lower boundary.

Under my principal analysis, I’ve marked the overnight low as the end of wave C {-11} within wave 4 of Subbitsy {-10} degree. (The numbers within the curly brackets are subscripts. See the chart or the menu page Analytical Methods  for a list and names and subscripts.)

Wave D {-11} to the upside is now underway. It’s completion near the upper boundary will be followed by wave E {-11} back to the lower boundary, whose completion will mark the end of Subbitsy wave 4 and the beginning of Subbitsy wave 5. The end of Subbitsy wave 5 will also be the end of a series of 5th waves of increasingly large degree, up four levels to Submicro degree. Up one more degree, it will be the end of wave 3 of Micro degree, began on May 19. The 3rd wave will be followed by a 4th wave correction.

Under my alternative analysis, wave C {-11} is still underway, as is its parent wave, the 4th of Subbitsy degree. This analysis will come into play if the price declines below 4497 — the overnight low — before reaching the region of the expanding triangle’s upper boundary.

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, 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, September 8, 2021

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
Creative Commons 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.

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The sharp decline during the day brought clarity to the chart. I’ve promoted my alternate analysis from this morning to principal analysis. The present movement is wave 4 of Subbitsy degree, a correction within the parent, wave 5 of Bitsy degree. These are small degrees, and the chart includes waves with a subscript — {11} — so small that I haven’t named it. The red lines, a price channel for Subbitsy wave 4, clearly shows an expanding triangle as the structure of the correction.

I’ve added a close-up chart of Subbitsy wave 4 and have left this morning’s chart as it was just after the opening bell.

[S&P 500 E-mini futures at 3:30 p.m., 15-minute bars, with volume]

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued their decline that began yesterday within a larger uptrend that began on September 1.

What does it mean? The decline is part of the early price movements within the rising final leg of the September uptrend.

What’s the alternative? The correction may have still be underway, taking the form of an expanding triangle.

[S&P 500 E-mini futures at 9:33 a.m., 45-minute bars, with volume]

What does Elliott wave theory say? The alternative analysis — the continuing correction — remains possible because the price remains below the September 3 high of 4549.50. Under my principal count, wave 5 of Subbitsy degree began on September 1. But the pattern within wave 5 that has emerged bears little resemblance to a move in the direction of the trend — a Motive Wave in the terminology of Elliott wave theory. In a Motive Wave, the 3rd wave takes off like rocket as the market accepts the trend as real. The 3rd internal wave of Subbitsy 5 is more of a shrug and a “Meh!” than a rocket.

The reason I’ve stuck to my principal analysis — the correction ended on September 5 — is because the high of September 3 exceeds the end of wave 3 of Subbitsy degree, on August 31. That doesn’t happen with the common corrective patterns — a Zigzag or a Flat — and so that high is likely to be a resumption of the trend.

However, there is a way to count the chart so that the correction is still underway. If the decline that began on August 31 was an expanding triangle, then the higher high on September 3 is within the rules of Elliott wave analysis. Under this scenario, the triangle’s 4th wave ended at the September 3 low of 4519.25, and the final 5th wave of the triangle is underway. When it is complete, then either wave 5 of Subbitsy degree begins, or there is an X-wave that creates a compound correction, with a second corrective pattern within Subbitsy wave 4.

That’s a long way of saying that this chart is messy, filled with ambiguity that will no doubt be resolved in the next few days of trading.

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, 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, September 7, 2021

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.

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