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, breaking past 5330. Elliott Wave Theory: The 3rd-wave uptrend that began on May 2 continues to work through its endgame.
I’ve updated the chart.
9:35 a.m. New York time
What’s happening now? The S&P 500 E-mini futures rose after the Consumer Price Index was released, from 5271 to 5303 in a single minute.
What does it mean? In Elliott Wave Theory, the rise was the 5th and final wave within an extremely small uptrend that began from Tuesday’s low, 5216.75. When that final wave is complete, it will also be the end of the parent wave, also a 5th wave, and of the next wave higher in the fractal structure of the price pattern, also a 5th wave.
The waves are labeled on the chart with the wave number followed by a subscript, in curly brackets showing how many degrees distant the wave is from Intermediate degree. The present Intermediate degree, wave 5{0}, began December 2018.
The smallest of the 5th waves listed above is wave 5{-10}, the parent wave is wave 5{-9}, and the next wave up is wave 5{-8}. All are positioned within a 3rd wave that began on May 2, wave 3{-7} from 5036.25. The simultaneous end of the smaller 5th waves will also be the end of that 3rd wave and the beginning a downward correction, wave 4{-7}, which will be followed by a 5th-wave uptrend that will complete the initial wave of the uptrend that began on April 18, wave 1{-6}.
What are the alternatives? Unchanged from yesterday. Is all of this really happening within wave 1{-6}, or should the wave placed at degree {-7} be labeled as degree {-6}, with the subwaves below being promoted by one degree. Impossible to say at this point. Time will tell.
[S&P 500 E-mini futures at 3:30 p.m., 85-minute bars, with volume]
What does Elliott wave theory say? Here are the waves that underly the analysis.
Principal Analysis:
- Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
- It is in its final subwave, wave 5{-1}.
- Within wave 5{-1}, rising waves 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
- Wave 1{-6} is underway and is in its middle subwave, wave 3{-7}, which is in its final subwave, wave 5{-8}.
- Wave 5{-8} is in its final subwave, wave 5{-9}, which is in its final subwave, wave 5{-10}.
Reading the chart. Price movements — waves – – in Elliott wave 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, May 15, 2024
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.
Based on a work at www.timbovee.com.
You must be logged in to post a comment.