3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 has remained below yesterday’s closing high during the session, rising to touch the upper price channel and then retreating to a slightly lower level than before.

The lower the price drops, the more likely this morning’s alternative #1 scenario becomes: The upward correction ended at yesterday’s high of 3820 on the futures. For now, I’m leaving the analysis unchanged from the morning’s principal scenario: The upward correction of the last few days 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 fell overnight from yesterdays high of 3820, and then rose again, remaining below that peak.

What does it mean? Different day, same song. The final leg of the upward correction that began on September 28 is still underway, although it is nearing completion. The subsequent decline and rise are movements of smaller scale within that final portion of the correction.

What are the alternatives? Or, equally likely — alternative #1 — the upward correction ended at yesterday’s peak, and the subsequent decline and rise are the first steps in a resumption of the downtrend that began on September 13.

Or, less likely — alternative #2 — the upward correction is taking a compound form, made up of two or three corrective patterns. The overnight decline and rise are movements within a downward movement that will connect the first corrective pattern, now complete, with a second correction pattern, which has not yet begun.

I’ve labeled the chart according to the principal analysis. The price channel, in red, has been set as though yesterday’s high was in fact the end of the correction. I think of it as a hypothetical price channel, since the real channel, which sets a lower target once the downtrend resumes, will need wait for the end of the correction.

What does Elliott wave theory say? Wave C{-10}, the final wave within wave 4{-9}, an upward correction that began on September 28 from 3613, is still underway. It set a high yesterday of 3820, and then pulled back slightly in a movement of lower degree within wave C{-10}. Wave 4{-9}, when complete, will be followed by wave 5{-9}, the final wave in a downtrend, wave 5{-8}, that began on September 13 from 4175.

A 4th wave cannot move beyond the end of the preceding 1st wave, setting an upward limit on wave 4{-9} of 3938.20, about 118 points above yesterday’s high. If the 5th wave that will follow wave 4{-9} adheres to the hypothetical price channel, which assumes that yesterday’s high was the end of the upward correction, then wave 5{-9} will come close to 3500 and will perhaps reach below it..

Under the 1st alternative analysis, wave 4{-9} ended at yesterday’s high and wave 5{-9} is underway.

Under the 2nd alternative analysis, wave 4{-9} is forming a compound correction, yesterday’s high was the end of the first corrective pattern, and the subsequent decline is wave X{-10}, connecting the first pattern with a second corrective pattern to come.

The parent wave of all of this Sturm und Drang, wave 5{-8}, is the final wave within wave 1{-7}, a downtrend that began on August 16 from 4325.28. Both the parent and the subwave will end simultaneously and wave 2{-7} will begin, an upward correction two degrees higher in size than our present concern, wave 4{-9}.

Wave 2{-7} will provide bulls some respite from the major bear trend that began on January 4 from 4818.62 on the index. That bear trend is wave 4{-1}, the penultimate wave within wave 5{0}, an expanding Diagonal Triangle that began on on December 26, 2018.

We Are Here.

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, 12/26/2018, 2346.58 (up)
• 4{-1} Minor, 1/4/2022 4818.62 (down)
• 1{-2} Minute, 1/4/2022 4818.62 (down)
• S&P 500 Futures and index:
• 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
• 1{-5} Micro, 1/4/2022, 4808.25 (down)
• 3{-6} Submicro, 8/16/2022, 4325.28 (down)
• 1{-7} Minuscule, 8/16/2022, 4325.28 (down)
• 5{-8} Subminuscule, 9/13/2022, 4175 (down)

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, October 6, 2022

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

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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures declined and then rose during the session, breaking above the overnight high. The new high confirms the principal analysis from this morning: The third subwave, C{-10}, within an upward correction, wave 4{-9}, is still underway. I’ve updated the chart, leaving the upper boundary of the price channel where it was this morning, touching the overnight high, in order to illustrate the extent of the session’s breakout.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures peaked at 3808.75 two minutes after yesterday’s closing bell sounded and then began an overnight decline that so far has reached the 3760s.

What does it mean? I see two choices of equal likelihood. For the principal analysis, appearing on the chart, I’ve arbitrarily chosen a scenario where the upward correction that began on September 28 has not yet reached its end, although it’s in its final stages.

What are the alternatives? There are two.

Alternative #1: Of equal likelihood with the principal analysis is a scenario that sees the 3808.75 peak as the end of the upward correction and the subsequent decline as the first tentative steps of a resumption of the downtrend that began on September 13.

Alternative #2: Also possible, although less likely, is a scenario that sees the 3808.75 peak as the end of the first corrective pattern within a compound correction that will contain two or three corrective patterns. This analysis sees the decline from the peak as the beginning of a connecting wave, which will be followed by a second corrective pattern.

If the price rises above yesterday’s peak, then the principal analysis is correct. If the price falls, then one of the alternatives is correct. The further the price falls, the more likely it is that alternative #1 matches the chart: The upward correction ended yesterday and the downtrend has resumed.

Note that the price channel on the chart assumes, for the sake of convenience, that 3808.75 was the end of the upward correction.

What does Elliott wave theory say? Under the principal analysis, the upward correction, wave 4{-9}, is still underway and is in its third and final leg, wave C{-10}.

The first alternative analysis has it that wave 4{-9} ended yesterday at 3808.75, and that price is the beginning of declining wave 5{-9}, the final wave within a larger downtrend, wave 5{-8}, that began on September 13 from 4175. This scenario matches the price channel on the chart. The channel’s upper boundary connects the starting points of waves 3 and 5, and we don’t yet know the starting point of wave 5, not as a certainty.

The second alternative sees the decline from the peak as wave X{-10}, a wave connecting the corrective pattern that ended yesterday with a future second pattern within a compound correction.

In any of the three possibilities presently on the table, wave 5{-9} will eventually begin, if it hasn’t already, and will carry the price down toward or below 3500.

But what happens next? The end of wave 5{-9} is also the end of wave 5{-8}, which began on September 13, and of its parent, wave 1{-7}, which began on August 16 from 4325.28. The fractal nature of a market chart means that any trend contains smaller trends and counter trends. Wave 1{-7} is the first wave within a larger downtrend, wave 3{-6}, which also began on August 16 from 4325.28. The wave that follows, wave 2{-7}, will be an upward correction that will take back a portion of the entire decline from 4325.38 to 3500 or wherever wave 5{-9} ends. It will be followed by downtrending wave 3{-7}, a powerful decline that will carry the price still lower, beyond the end of wave 5{-9}.

And so it goes, waves within waves, all the way the up the present set of downtrending waves to the largest of them all, wave 4{-1}, which began on January 4, 2022 from 4818.62.

Wave 4{-1} is the next-to-the-last wave within an expanding Diagonal Triangle, wave 5{0}, that began on December 26, 2018 from 2346.58 on the index. Prices will remain below wave 4{-1}’s starting point, 4818.62, until the wave is complete. Afterward, wave 5{-1} will likely carry the price to heights, above that wave 4{-1} beginning.

Until then markets will be downtrending, but with a lot of bullish opportunities in the mix as the price works its way downward. The thing to remember in interpreting the chart within wave 4{-1} is this: Waves 1, 3 and 5, bearish, and waves 2 and 4, bullish.

We Are Here.

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, 12/26/2018, 2346.58 (up)
• 4{-1} Minor, 1/4/2022 4818.62 (down)
• 1{-2} Minute, 1/4/2022 4818.62 (down)
• S&P 500 Futures and index:
• 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
• 1{-5} Micro, 1/4/2022, 4808.25 (down)
• 3{-6} Submicro, 8/16/2022, 4325.28 (down)
• 1{-7} Minuscule, 8/16/2022, 4325.28 (down)
• 5{-8} Subminuscule, 9/13/2022, 4175 (down)

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, October 5, 2022

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

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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 continued to rise during the session, reaching just above 3800 and confirming the principal analysis from this morning.

I’ve updated the chart, including an adjustment to the price channel that places the upper boundary on today’s new high, with the understanding that this high may be just a stopping point before the price increases further.

The upper limit for a 4th wave is the end of the preceding 1st wave, which wave 1{-9), ending at 3938.50. If wave C{-10} should carry its parent, wave 4{-9}, above that level, then the analysis no longer matches the chart and will cry out for revision.

I’ve updated the chart, below.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to rise in overnight trading, reaching into the 3760s.

What does it mean? An upward correction that began on September 28 is still underway and is in its final leg. It has exceeded the price target that would be typical of a formation of its type, 3660.25 to 3733 in this case. The correction, when complete, will be followed by a resumption of the downtrend that began on September 13 from 4175, a move that likely will carry the price into the low 3500s and perhaps lower still.

I’ve placed a tentative price channel on the chart below, in red, that assumes the upward correction has ended at the overnight high. That’s probably not the case, but nonetheless, the channel gives some idea of how far the resumed downtrend is likely to fall.

What are the alternatives? The present task is to identify an endpoint of the the upward correction. There are several possibilities.

Alternative #1: The present high is the end of the upward correction. This scenario will be tentatively confirmed if the price reverses to the downside, the first leg of the resumed downtrend. (The price channel assumes this scenario, but the chart labeling reflects the principal analysis: The correction has further to go.)

Alternative #2: The correction takes a compound form, linking together two or three corrective patterns. This scenario will also be tentatively confirmed if the price reverses to the downside, except in this case, the decline will be a connector wave, linking the first corrective pattern with a second one to come.

The lower the price goes, the more likely alternative #1 is. A reversal upward from the low or mid-3600s suggests that alternative #2 is more likely.

What does Elliott wave theory say? The price channel now in place has an upper boundary linking the end of wave 2{-9} and the presumed (uncertain) end of wave 4{-9}, with a lower boundary passing through the end of wave 3{-9}.

The present upward correction, wave 4{-9}, is internally in late stage of wave C{-10}. This is a change from yesterday’s labeling, which placed the present rise as wave C{-11} within wave A{-10}, the first leg of the parent wave 4{-9}. The price channel suggested to me that raising the {-11} degree to {-10} better matched the reality on the chart.

The C wave in a three-wave correction must have five waves internally, and wave C{-10} has met that requirement.

Fourth waves tend to end within the range of the 4th wave within the preceding 3rd wave. Wave 4{-10} within wave 3{-9} ranged from 3660.25 to 3733. Wave 4{-9} has already exceeded that range, have reached a high of 3761.50.

Wave 4{-9}, when complete, will be followed by a resumption of its parent, wave 5{-8}, which began on September 13 from 4175. The price channel’s lower boundary gives an indication of how far wave 5{-9} might fall before reaching its end. Presently, the lower boundary is at 3571.75, and it moves lower every minute of every day. If the present wave 4{-9} peak is indeed the end, and if it takes wave 5{-9} four trading days to reach its completion, then the price target would be around 3500.

But 5th waves are inconsistent beasts. Sometimes they fall short of the price channel boundary, a condition called “truncation” in Elliott wave parlance, and sometimes they move far past the target, a condition called “extension”.

Under the principal analysis, wave C{-10} has not yet reached its end, and the upper boundary of the price channel will require adjustment for each new peak.

Under the first alternative, the present peak is the end of wave C{-10} and wave 5{-9} has already begun. If that’s the case, then the price channel stands as it is now.

Under the second alternative, the present peak, or a future peak, marks the end of the first corrective pattern within wave 4{-9} and willing followed by downward wave X{-10}, connecting the first pattern with a second one, in a compound correction that can take a wide variety of forms. Only after the compound correction is over will wave 5{-9} begin.

Wave 5{-8} is the smallest of a series of nested downtrending waves, reaching up seven degrees to wave 4{-1}, which began on January 4 from 4818.62 on the index.

Its parent is wave 5{0}, an expanding Diagonal Triangle that began on December 26, 2018 from 2346.58 on the index. Wave 4{-1} within wave 5{0} will be followed by wave 5{-1}, a large uptrend that will most likely carry the price to new highs, above the low 4800s. The end of wave 5{-1} will also complete wave 5{0} and a series of larger waves, up to wave 5{+3}, which began in 1932. A decades-long downward correction will follow. (See the We Are Here section below for a list of current waves from 5{-8} up to 5{+3}.)

We Are Here.

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, 12/26/2018, 2346.58 (up)
• 4{-1} Minor, 1/4/2022 4818.62 (down)
• 1{-2} Minute, 1/4/2022 4818.62 (down)
• S&P 500 Futures and index:
• 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
• 1{-5} Micro, 1/4/2022, 4808.25 (down)
• 3{-6} Submicro, 8/16/2022, 4325.28 (down)
• 1{-7} Minuscule, 8/16/2022, 4325.28 (down)
• 5{-8} Subminuscule, 9/13/2022, 4175 (down)

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, October 4, 2022

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

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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 continued to rise during the session, reaching into the 3710s on the futures. The upward reversal confirms this morning’s principal analysis and eliminates the alternative analysis. In Elliott wave terminology, wave C{-11} within wave A{-10} within wave 4{-9}, an upward correction, are underway. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell overnight, to 3571.75, and then rose, reaching back into the 3640s.

What does it mean? The overnight low ended the second leg of an upward correction within the first leg of a larger upward correction.

What are the alternatives? If the price reverses and falls significantly lower, with five waves internally, then it means that the larger correction is in fact over and the downtrend has resumed, requiring a reanalysis of the decline from September 20.

What does Elliott wave theory say? Under the principal analysis, wave A{-10}, an upward correction within wave 4{-9}, has been underway since September 28. Wave A{-10} has three waves internally if the parent wave’s pattern in a Flat, or five waves if it is a Zigzag. It has completed two waves, A{-11} and B{-11}, and has begun wave C{-11}. If the pattern is a Flat, then the present wave C{-11} is the end of wave A{-10} and will be followed by a declining wave B{-10}. If the pattern is a Zigzag, then wave C{-11} will be followed by two more waves, waves D{-11} and E{-11}. After E{-11} is complete, then wave B{-11} will continue the larger wave 4{-9}.

The overnight price fell below the start of wave 4{-9}, and although such a fall below the starting point isn’t done in 2nd waves, it happens routinely in 4th waves. A short rising wave C{-11} and then a large decline would, however, trigger the alternative count: Wave 4{-9} ended on September 28, at the peak of what is now labeled wave A{-11} on the principal analysis, and wave 5{-9} has begun.

The recount would most likely put the end of wave 4{-10} at the peak of what is now wave A{-11} and label the ensuing decline as wave 5{-10}.

All of this is happening within downtrending wave 5{-8}, which began on September 13 from 4175, the low wave of a nested series of downtrending waves stretching up seven degrees, to declining wave 4{-1}, which began on January 4 from 4818.62, the next to the last wave within an expanding Diagonal Triangle, wave 5{0}, that began on December 26, 2018, from 2346.58 on the index. Wave 4{-1} will be followed by rising wave 5{-1}, which will carry the price above the January 4 start of wave 4{-1}, perhaps significantly higher.

We Are Here.

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, 12/26/2018, 2346.58 (up)
• 4{-1} Minor, 1/4/2022 4818.62 (down)
• 1{-2} Minute, 1/4/2022 4818.62 (down)
• S&P 500 Futures and index:
• 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
• 1{-5} Micro, 1/4/2022, 4808.25 (down)
• 3{-6} Submicro, 8/16/2022, 4325.28 (down)
• 1{-7} Minuscule, 8/16/2022, 4325.28 (down)
• 5{-8} Subminuscule, 9/13/2022, 4175 (down)

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, October 3, 2022

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

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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 fell below Thursday’s low, 3660.25 on the futures. The shortness of the preceding rise and the depth of the fall suggest that wave B{-10} within an upward correction, wave 4{-9}, is still underway. This was the alternative scenario in this morning’s analysis, and I’ve changed the upper chart’s labeling to conform.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight into the 3690s and then declined back into the 3640s.

What does it mean? The first leg of an upward correction that began on September 28 is underway and appears to now be in its third internal wave.

What are the alternatives? The third internal wave seems to be overly small, and so it may well be a movement of an even smaller degree, perhaps continuing second internal wave.

What does Elliott wave theory say? By my principal analysis, upward wave C{-11} is underway. It is enclosed by upward wave A{-10} within an upward correction, wave 4{-9}. The alternative analysis speculates that wave C{-11} is actually part of the preceding downward wave, B{-11}, which is not yet complete.

This is all happening within a series of increasingly larger downtrending waves, nested like Russian matryoshka dolls. The waves range from 5{-8}, which began on September 13 from 4175 on the futures, up to descending wave 4{-1}, which began on January 4 from 4918.62 in the index. The entire series is contained within an expanding Diagonal Triangle, wave 5{0}, which began on December 26, 2018. Wave 4{-1} will be followed by an ascending wave, 5{-1}, that will carry the price to new highs and, when complete, will also be the endpoint of the Triangle.

This chart shows the Diagonal Triangle in its entirety so far. The red lines are the Triangle’s price-channel boundaries.

We Are Here.

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, 12/26/2018, 2346.58 (up)
• 4{-1} Minor, 1/4/2022 4818.62 (down)
• 1{-2} Minute, 1/4/2022 4818.62 (down)
• S&P 500 Futures and index:
• 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
• 1{-5} Micro, 1/4/2022, 4808.25 (down)
• 3{-6} Submicro, 8/16/2022, 4325.28 (down)
• 1{-7} Minuscule, 8/16/2022, 4325.28 (down)
• 5{-8} Subminuscule, 9/13/2022, 4175 (down)

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, September 30, 2022

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

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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 fell during the day, continuing the decline from yesterday’s high, 3751.25 on the futures, into the 3620s. The second segment within the first leg of a three-leg upward correction is underway — Wave B{-11} within wave A{-10} within wave 4{-9}, which began on September 28 from 3613.

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 declined in overnight trading, pulling back from yesterday’s session high, 3726.50.

What does it mean? The strength of yesterday’s rise forced a full re-analysis of the decline that began on September 13. Under the new analysis, an upward correction began yesterday and will retrace a portion of the decline that began on September 15. Yesterday’s rise is the initial leg of the first part of a three-part correction.

See the Elliott wave theory section below for details of the re-analysis.

What are the alternatives? It’s possible to consider yesterday’s rise to have completed the first part of the upward correction. The lack of visible internal structure within that rise persuades me that the principal analysis has the stronger case.

What does Elliott wave theory say? As I noted in yesterday’s closing post, the rapid price rise, wave 2{-15}, moved above the September 27 high, wave 1{-15}, and in doing so under the old analysis it broke a rule of Elliott wave theory: A 2nd wave can’t move above the start of the preceding 1st wave. To bring analysis back in line with the reality of the chart, I’ve done a full re-analysis.

Under the new principal analysis,

• the September 27 high is wave 4{-10} (formerly wave 4{-14}),
• the September 28 low is the end of wave 5{-10} and its parent, wave 3{-9} (formerly the end of wave 1{-15})
• and the subsequent rise is wave A{-11} within wave A{-10} within wave 4{-9} (formerly wave 2{-15} within wave 4{-14}.

Under the new alternative analysis, the subsequent rise is the entirety of wave A{-10}.

The difficulty posted by the decline from September 13 is the initial wave, 1{-9}, which is 236.50 points in length, easily the longest wave within the entire decline to date. A valid count must ensure that no 3rd wave is the shortest of the three waves in the direction of a trend, wave 1, 3 and 5. To meet that requirement, the decline from September 15-19 following wave 2{-9} can’t be wave 3{-9} — it’s too short. So I’ve adopted the usual solution and pushed the wave degrees down one level, making that decline wave 1{-10} within wave 3{-9}, and following through later events with that same degree structure.

In my tinkering with the count, I was also able to avoid taking the wave degrees down to a such a small level as the prior count had required. All in all, it’s a much simpler description of the fractal structure, and brings the chart labeling back in in line with Elliott wave theory, not at all a trivial matter.

The larger picture is unchanged. Everything described above is happening within wave 5{-8}, a downtrend that began on September 13 from 4175. It lies within a series of nested waves, each larger than the wave it encloses, stretching up to wave 4{-1}, which began on January 4 from 4818.62 on the index, the next-to-the-last wave of a Diagonal Triangle, uptrending wave 5{0}, that began on December 26, 2018 from 2346.58 on the index.

We Are Here.

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, 12/26/2018, 2346.58 (up)
• 4{-1} Minor, 1/4/2022 4818.62 (down)
• 1{-2} Minute, 1/4/2022 4818.62 (down)
• S&P 500 Futures and index:
• 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
• 1{-5} Micro, 1/4/2022, 4808.25 (down)
• 3{-6} Submicro, 8/16/2022, 4325.28 (down)
• 1{-7} Minuscule, 8/16/2022, 4325.28 (down)
• 5{-8} Subminuscule, 9/13/2022, 4175 (down)

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, September 29, 2022

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

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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 has continued to rise during the session, reaching into the 3730s on the futures. The rising wave 2{-15} has moved above the start of the preceding wave 1{-15}, from 3733, and so the structure of the parent, wave 5{-14} can’t be a Triangle, according to the rules of Elliott wave analysis. Something else is going on.

As the human foundling Valentine Michael Smith, raised by Martians in Robert Heinlein’s sci-fi classic Stranger in a Strange Land, was wont to say, “Waiting is”.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures declined to 3613 in overnight trading and then rose back into the 3680s.

What does it mean? The final segment of a downtrend that began on September 22 is underway and is still in its early stages. When complete, it will also end a series of larger downtrends and will be followed by an upward correction of the downtrend that began on September 13.

What is the alternative? It’s possible that the overnight low marks the end of an extremely short final segment in the downtrend that began on September 22. If that scenario plays out, then the upward correction has already begun.

What does Elliott wave theory say? Under the principal analysis, wave 5{-13} is underway. It is the final subwave within wave wave 5{-12}, which in turn is the final subwave within wave 5{-11}, and that in turn is the final subwave within wave 3{-10}, which began on September 13. When wave 3{-10} is complete, it will be followed by an upward correction, wave 4{-10}, which will retrace a portion of the decline from 4051.25.

Under the alternative analysis, wave 5{-10} ended at the overnight low, 3613, and wave A{-11} within wave 4{-10} has begun.

There are ambiguities impacting both analyses. Wave 5{-14}’s first internal wave, wave 1{-15}, has three subwaves. That’s the form of either a downward correction, which doesn’t match the context on the chart, or of a Triangle form of some type, which does match the context. There is a blip of a wave which can bring internal count to five subwaves, but then wave 3{-15} is overly short — a 3rd wave can’t be shorter than both the 1st and 5th waves that surround it.

For the moment my best choice is to leave the internal structure of wave 5{-14} unresolved, in the certain expectation that the market will resolve all ambiguities as it progresses.

When wave 4{-10} is complete, it will be followed by downtrending wave 5{-10}, which will be the end of wave 1{-9}, which began on September 13 from 4175. All of this is occurring within a series waves within waves of increasing size, up to wave 4{-1}, which began on January 4 from 4818.62 on the index.

We Are Here.

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, 12/26/2018, 2346.58 (up)
• 4{-1} Minor, 1/4/2022 4818.62 (down)
• 1{-2} Minute, 1/4/2022 4818.62 (down)
• S&P 500 Futures and index:
• 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
• 1{-5} Micro, 1/4/2022, 4808.25 (down)
• 3{-6} Submicro, 8/16/2022, 4325.28 (down)
• 1{-7} Minuscule, 8/16/2022, 4325.28 (down)
• 5{-8} Subminuscule, 9/13/2022, 4175 (down)
• 1{-9} (no name), 9/13/2022, 4175 (down)
• 3{-10} (no name), 9/13/2022, 4051.25 (down)
• 5{-11} (no name), 9/15/2022, 3977.50 (down)

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, September 28, 2022

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

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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 peaked during the session and then declined to below the starting point of the upward correction that began on September 23. The correction, wave 4{-14}, began from 3660.25 on the futures and peaked today at 3733.

Under the principal analysis, that peak completed wave C{-15} and its parent, wave 4{-14}. The correction having ended, wave 5{-14} is underway.

Under the alternative analysis, the peak completed wave C{-15} and the first corrective pattern within wave 4{-14}, and the subsequent decline is a connector, wave X{-15}, that will be followed by a second corrective pattern as wave 4{-14} continues. The rules governing Elliott wave analysis allow a 4th wave to fall below the wave’s starting point (in contrast to 2nd waves, where such a break below is disallowed).

The more the price drops, the greater the likelihood of the principal analysis. The more the price rises from this point, the greater the likelihood of the alternative analysis.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to trade sideways overnight, staying within a narrow range centered on the 3700 price level.

What does it mean? The relatively small upward correction that began on September 23 continues and is in its third and possibly final leg. When the correction is complete, the downtrend that began on September 22 will resume.

What is the alternative? If the correction forms a compound structure, then the third leg of the corrective pattern will be followed by a connector wave to the downside, and then by a second corrective pattern.

What does Elliott wave theory say? Rising wave C{-15} within the upward correction, wave 4{-14} is underway.

Under the principal analysis, wave C{-15} will be followed by downtrending wave 5{-14}, the final wave within wave 5{-13}, which began on September 22.

Under the alternative analysis, wave C{-15} will be followed by downward wave X{-15} and then a second corrective pattern and afterward perhaps by a third. When the compound correction, wave 4{-14}, is complete, then wave 5{-14} will begin its decline,

All of this is happening within downtrending wave 5{-12}, which began on September 20, the final wave within wave 5{-11}, which began on September 15. See the “We Are Here” section, below, for a list of current waves larger than the {-11} degree.

We Are Here.

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, 12/26/2018, 2346.58 (up)
• 4{-1} Minor, 1/4/2022 4818.62 (down)
• 1{-2} Minute, 1/4/2022 4818.62 (down)
• S&P 500 Futures and index:
• 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
• 1{-5} Micro, 1/4/2022, 4808.25 (down)
• 3{-6} Submicro, 8/16/2022, 4325.28 (down)
• 1{-7} Minuscule, 8/16/2022, 4325.28 (down)
• 5{-8} Subminuscule, 9/13/2022, 4175 (down)
• 1{-9} (no name), 9/13/2022, 4175 (down)
• 3{-10} (no name), 9/13/2022, 4051.25 (down)
• 5{-11} (no name), 9/15/2022, 3977.50 (down)

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, September 27, 2022

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

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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 continued trading in a narrow range. The pattern fits that described in this morning’s principal analysis: The first wave of an upward correction that began on September 23 is underway and has completed its rising first leg and perhaps its declining second leg, all part of a correction with three segments.

In Elliott wave terminology, from small to larger, wave A{-15} within the upward correction, wave 4{-14}, ended at the overnight high with five waves internally. That suggests that the correction is taking the form of a Zigzag. Wave B{-15} will have three internal waves, and the final segment, wave C{-15}, will have five internal waves and will likely end the correction, unless it forms a compound structure. The correction is part of downtrending wave 3{-13}, which began on September 21, the middle wave with downtrending wave 5{-12}, which began on September 20.

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 remained within a narrow range after trading resumed Sunday evening, between a high of 3718.25 and a low of 3671.50.

What does it mean? A smaller upward correction within a downtrend that began on September 22 is underway, and the decline will resume shortly, one the correction is complete.

What is the alternative? The overnight peak might well have ended the correction’s third and final wave, and if that’s how the chart plays out, then the downtrend has resumed and is in its 5th and final wave.

What does Elliott wave theory say? The downtrend is wave 5{-13}, which began on September 22 from 3833. The internal correction, now underway according to the principal analysis, is wave 4{-14}. According to the alternative analysis, upward wave 4{-14} is complete and downtrending wave 5{-14} within its parent, downtrending wave 5{-13}, has begun.

The correction has clearly completed three waves internally, and the difference between the principal analysis and the alternative is where we place those three waves in the fractal hierarchy of the chart. The principal analysis treats those three waves as waves A{-16}, B{-16} and C{-16} — subwaves of wave A{-15}, the first wave within wave 4{-14}. The alternative analysis treats those three waves as being one degree higher, at degree {-15}. So in the principal analysis, the three waves completed the first wave of the correction. In the alternative, they completed the whole correction.

If the price falls below 3660.25 and continues to fall, it strengthens the case for the alternative analysis. If the price reverses and rises toward 3766.75, it strengthens the case for the principal analysis.

And, in fact, the price has risen from the low, into the 3700 region, buttressing the principal analysis.

This is all happening within a nested series of downtrending waves, ranging from wave 5{-12}, which began on September 20, up to wave 4{-1}, which began on January 4 and is the next-to-the-last wave within wave 5{0}, a Diagonal Triangle that began on December 26, 2018.

The end of wave 5{-13} will also be the end of waves 5{-12} and 5{-11}, and of the parent wave, 3{-10}, which began on September 13. Wave 3{-10} will be followed by an upward correction that is larger than the one presently underway.

Big picture: Wave 4{-1} is still in its early stage, in wave 1{-2} one degree lower. When wave 4{-1} is complete, wave 5{-1} will carry the price to the upper boundary of the expanding Diagonal Triangle, which is now in the upper 5000s and will soon enter the 6000s. When wave 5{-1} is complete, it will trigger completion of wave 5{0} and also of a nested series of waves of increasing size, up to uptrending wave 5{+3}, which began on July 8, 1932. A downward correction of astounding size will follow, correcting nearly a century’s worth of market gains. But that’s year’s in the future and not of immediate concern.

We Are Here.

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, 12/26/2018, 2346.58 (up)
• 4{-1} Minor, 1/4/2022 4818.62 (down)
• 1{-2} Minute, 1/4/2022 4818.62 (down)
• S&P 500 Futures and index:
• 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
• 1{-5} Micro, 1/4/2022, 4808.25 (down)
• 3{-6} Submicro, 8/16/2022, 4325.28 (down)
• 1{-7} Minuscule, 8/16/2022, 4325.28 (down)
• 5{-8} Subminuscule, 9/13/2022, 4175 (down)
• 1{-9} (no name), 9/13/2022, 4175 (down)
• 3{-10} (no name), 9/13/2022, 4051.25 (down)
• 5{-11} (no name), 9/15/2022, 3977.50 (down)

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, September 26, 2022

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

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.

Las Vegas Sands Corp. (LVS)

Lot 2022-2

Update 10/11/2022: I exited my short bear call vertical spread on LVS, 10 days before expiration, for a $1.98 debit per contract/share, a loss before fees of $78 per contract. Shares were trading at $37.65, up $2.91 from the entry level.

The Implied Volatility Rank at exit was 81.6%, up 28 points from the entry level.

I exited because the position was showing a loss and expiration was approaching. The options spread produced the maximum possible loss. Shortly after I entered the bear put spread, Chinese authorities reopened the gambling center Macau to tourists, enhancing the profit potential of Las Vegas Sands’ casino operations there. The share price rose dramatically, and for most of my holding period remained at levels that, if I had exited, would have produced a greater loss than I would have incurred by letting the options expire or be exercised.

Shares rose by 8.4% over 18 days for a +170% annual rate. The options position produced a 41.3% loss for a -837% annual rate.

---

I have entered a short bull put vertical spread on LVS, using options that trade for the last time 28 days hence, on September 21. The premium is a $1.11 credit per contract share and the stock at the time of entry was priced at $34.74.

The Implied Volatility Ratio stood at 53.6%.

Premium:	$1.11	Expire OTM
LVS-bear call spread	Strike	Odds	Delta
Calls
Long	38.00	75.0%	30
Break-even	36.11	65.0%	40.5
Short	35.00	55.0%	51

The premium is 74% of the width of the position’s short/long spread. The profit zone covers a 3% move to the upside and an unlimited move to the downside.

The risk/reward ratio is 1.7:1, with maximum risk of $189 and maximum reward of $111 per contract.

How I chose the trade. The trade was placed after the Parabolic SARS indicator gave a bear signal for a third day running. The bear signal was confirmed by a negative reading on the Fisher Transform indicator. The Zacks Investment Research ranking was 4, which is also bearish. The short strike was set to coincide with the expected move in the share price of $0.60 either way, based on options pricing, which gives an upper price expectation of $35.34.

By Tim Bovee, Portland, Oregon, September 23, 2022

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

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.