3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 has continued to rise through the trading session, reaching 4267 on the futures, 4635.15 on the index. The new highs exceed yesterday’s high, which means that wave 4 of Subbitsy degree within wave 5 of Bitsy degree is complete, and wave 5 of Subbitsy degree has begun. Alternatively, the degree could be smaller than Subbitsy. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures remained below Monday’s peak, 4619.50, as the price traced a sideways pattern.

What does it mean? The shallow correction is the fourth leg of the rise that began October 27 and will be followed by a rise to new highs.

What’s the alternative? The ambiguities have to do with how long the correction might take and how far the price might rise after the correction. I discuss the possibilities in the Elliott wave section, below.

What does Elliott wave theory say? Under my principal analysis, the rise that began October 27 is wave 5 of Bitsy degree within wave 3 of Subminuscule degree, the larger wave having begun on October 13. Yesterday’s peak marked the end of wave 3 of Subbitsy degree within Bitsy wave 5, and the subsequent sideways movement is wave 4 of Subbitsy degree. After Subbitsy 4 is complete, Subbitsy wave 5 will rise to new highs. When Subbitsy wave 5 reaches its end, the parent, Bitsy wave 5, will be complete, as will the grandparent, Subminuscule wave 3. Subminuscule 3 will be followed by a larger 4th wave correction, most likely one that is shallow, following a Flat pattern.

The ambiguities surround the nature of the corrections, what form they will take and how much time each will consume before completion.

What I have called Subbitsy wave 4 could in fact be a smaller degree, one that must reach completion before its parent or grandparent wave, Subbitsy wave 3, is complete. Degrees in Elliott wave theory always have a bit of ambiguity.

In any degree, 4th waves tend to be Flats, trending sideways, but sometimes they trace Triangles, which can have more verticality, or compound structures, containing two Flats, a Flat and a Zigzag or a Flat and a Triangle in some order.

The same ambiguity applies to the future and larger 4th wave of Subminuscule degree.

So based on the analysis, we know that there will be higher highs in the near future. How high and when it will happen remain uncertain.

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, November 2, 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

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.

3:25 p.m. New York time

Thirty-five minutes before the closing bell. The high set in overnight trading has prove to be the high (so far) of the day. The S&P 500 fell thereafter, so far reaching a low of 4586.50. The decline could be the end of the 3rd wave of Subbitsy degree within wave 5 of Bitsy degree. Or it could be a subwave of the 1st wave of Subbitsy degree. In either case, the corrective decline will be followed by a rise to new heights. 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 continued to rise when trading resumed overnight, so far reaching 4619.50.

What does it mean? The uptrend that began October 12 is still underway and in the middle section of its rise. Internally, it is in its final section, which in turn is in its middle section. (A trend has three movements in the direction of the trend.)

What’s the alternative? There is no strict upper limit to the rise, beyond the need to be proportional to the size of the overall movement and to more or less adhere to the price channels and triangle boundaries. The S&P 500 has been working its away along the upper boundary of an expanding Diagonal Triangle that began in December 2018. This provides a very loose limit to how high the trend can go.

What does Elliott wave theory say? The present rise is wave 5 of Bitsy degree within wave 5 of Subminuscule degree within wave 3 of Minuscule degree, which began on October 4 from 4267.50. Within Bitsy wave 5, at the Subbitsy degree, the 3rd wave is underway.

Subminuscule wave 5, when complete, will mark the end of its parent, Minuscule wave 3, which will be followed by a shallow correction, Minuscule wave 4, that in turn will be followed by a move to new highs by as Minuscule wave 5.

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, November 1, 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

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 dropped back from its new peak as the closing bell approaches. No change in the revised analysis. I’ve updated the charts.

1:35 p.m. New York time

New peak. The S&P 500 has exceeded the October 26 high, confirming that the rise from October 13 is still underway. In Elliott wave terms, that rise is wave 5 of Bitsy degree within wave 3 of Subminuscule degree. So far the peak is 4596.75 on the futures; 4604.11 on the index. Chart updated.

11:20 a.m. New York time

My trades. Today is management day for my short bear call vertical spread position on FXI, 21 days before the options expire. The price rose the day after I entered the position, putting my position in the money and therefore unprofitable. The price peaked on October 22 and since then has fallen back toward profitability. Under my rules, had the position been profitable I would have exited today. It’s not profitable at present, but the price is moving toward profitability. So I’ll continue to hold in the expectation that the price, now at $40.43, will move below the short call strike of $39. One the position is at break-even or better, I’ll exit.

10:20 a.m. New York time

Long-term chart. I’ve added in a longer-term chart of the S&P 500 index, showing the boundaries of the expanding Diagonal Triangle that has been underway since December 2018. It gives perspective to the present market drop, which is a nearly invisible scratch to the right of the 4598.53 peak. The chart is below the shorter-term chart in the original post.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued a shallow sideways movement, remaining below Wednesday’s high as it traced the third leg of the pattern.

What does it mean? The correction appears to be too shallow to be correcting the rise from October 13. A Fibonacci ladder (in red) shows the retracement falls significantly short of a 23.6% Fib retracement.

What’s the alternative? That the retracement is a correction of the rise from October 13. See the Elliott wave theory section below for a discussion.

What does Elliott wave theory say? The correction of the rise from October 13, if it’s happening, would be wave 4 of Subminuscule degree. There is no rule in Elliott in Elliott requiring a certain depth of correction in a 4th wave.

The Elliott guidance is that the wave alternate in form from the preceding 2nd wave, which this sideways movement fulfills. The 2nd wave was a Zigzag; this movement is a Flat.

The only guidance as to the depth of the correction is that 4th waves generally end within the 4th wave of the preceding 3rd wave, which I’ve marked with a tan oval on the chart. In this case that would imply a 50% retracement, and the three waves of the present pattern falls well short of that.

Long story short: I’m not sure what a degree of movement we’re seeing. As always, the ambiguity will resolve itself, either with the price falling to a level appropriate for a correction of this degree, or the price rising above 4590, the high of October 26, which would demonstrate that the uptrending wave 5 of Bitsy degree within wave 3 of Subminuscule degree is still underway.

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, October 29, 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

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 rose during the trading session, reaching 4584.75 on the futures, 4592.69 on the index, each slightly below the October 26 peak of 4590 on the futures, 4598.53 on the index. No change in the analysis. I’ve updated the chart.

9:40 a.m. New York time

What’s happening now? The S&P 500 E-mini futures reached a low of 4543.75 in overnight trading, down 46 points from the October 26 peak, and then rose slightly in a sideways pattern, remaining below the peak.

What does it mean? The two alternatives I described yesterday remain: Either the decline is a small internal correction as the rise that began October 13 continues. Or the October 26 peak ended that rise, and the subsequent decline is the first small steps in what will be a correction of that rise. I consider the two alternatives to be of equal likelihood. The lower the price goes, the more likely it is that the second alternative is correct. At this point, however, I’ve continued to label the chart with the first alternative.

Other alternatives? It’s possible, although unlikely, that October 26 marked the end of the rise that began on in February 2020, from the end of the early pandemic crash. The end of that rise will be followed by a decline that will eventually carry the price down by more than 2,000 points. This alternative would require a major reworking of the chart analysis since February of last year.

What does Elliott wave theory say? By the first principal count, wave 5 of Bitsy degree within wave 3 of Subminuscule degree continue to rise. By the second principal count, Bitsy 5 within Subminuscule 3 ended on October 26, and wave 4 of Subminuscule degree is underway. Since the preceding 2nd wave of Subminuscule degree was a Zigzag pattern, it is likelh that Subminuscule 4 will be Flat, although there are other options.

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, October 28, 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

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 trade slightly below Friday’s high of 4590 as the session neared its end, staying within 35 points of that peak until late in the session, when the price dropped to 4550.50. No change in the analysis. I’ve updated the chart.

9:50 a.m. New York time

What’s happening now? The S&P 500 E-mini futures remained slightly below yesterday’s peak, 4590,

What does it mean? Two possibilities, of equal likelihood: Either the decline from the peak is a low-level correction that will be quickly followed by a rise to new highs (which is how I’ve labelled the chart).

Or the decline marks the end of larger rise that began October 13 and the beginning of a shallow correction which in turn will be followed by a rise to new highs.

What is the alternative? A bearish alternative would be to redo the analysis entirely, making yesterday’s high the end of the rise that began February 23, 2020. Based on the internal count, I consider this to be of extremely low probability.

What does Elliott wave theory say? The rise from October 13 is wave 3 of Subminuscule degree. Internally, it is in wave 5 of Bitsy degree, which has turned to be a hard-to-count wave, which lots of ambiguity. I think it has met all of the Elliott requirements for completion, but it can continue extending for quite some time.

Of equal likelihood is a scenario where yesterday’s high ended wave 3 of Subminuscule degree, and the subsequent slight decline is an early stage within wave 4 of Subminuscule degree. The 4th wave could trace one of three patterns: Zigzag, Flat or Triangle. I’m betting on Flat, which is a shallow correction.

The alternative scenario sees yesterday’s high as the end of wave 2 and the beginning of wave 3 of Minor degree, at the end of the early pandemic crash, on February 23, 2000. Minor degree is seven degrees larger than Subminuscule degree and is the largest internal degree of wave 5 of Intermediate degree, an expanding Diagonal Triangle, wave 5 of Intermediate degree, that began in December 2018. The internal count suggests that the price is in wave 1 of Submicro degree, four levels below Intermediate, and that Minor wave 3 won’t be complete until the end of wave 5 of Submicro degree.

So how much high does the S&P 500 really have? As shown in the longer-term chart that I posted on Friday, the price since April has been bouncing along the upper boundary of the Diagonal Triangle that began nearly three years ago. The price can go above that boundary, but usually not by a lot. So I expect the price to continue its work at the boundary, with maybe a final push above to complete wave 5 of Intermediate 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, October 27, 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

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 pulled back slightly from the overnight peak of 4580.75 on the futures, 4598.53 on the index when the session opened. 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 continued to rise overnight, reaching a peak so far of 4580.75.

What does it mean? The rise that began October 18 is still underway, marking the final leg of the uptrend that began on October 12 within the middle leg of the uptrend that began on October 4.

What’s the alternative? Any peak can mark the uptrend’s completion and the beginning of a downward movement. We’ll never know until the decline has become sufficiently large.

What does Elliott wave theory say? The rise from October 18 is wave 5 of Bitsy degree within wave 3 of Subminuscule degree. Under the Elliott rules, there is no limit on how high an impulse wave can go, except for the need to preserve a balance in distance covered and time taken that is appropriate for the degree. Waves at the Subminuscule level tend to be over in days — weeks at most.

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, October 26, 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

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 futures peak attained earlier in the session remains in place, 4564. The index is a bit higher, at 4572.62. Wave 3 of Subminuscule degree continues its rise.

1:40 p.m. New York time

A new peak. The S&P 500 exceeded Friday’s high, setting a peak so far of 4564 on the futures, 4571.98 on the index. This means that the alternative analysis is correct. Wave 3 of Subminuscule degree, which began on October 13, is still underway. I’ve updated the chart.

10:05 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose in overnight trading to 4548, slightly below Friday’s peak, 4551.50, and then five minutes before the opening bell fell sharply, to 4528.75.

What does it mean? The shallow correction that began with Friday’s peak continues.

What’s the alternative? If the price pushes above above 4551.50, then the correction is over and the uptrend that began October 12 has resumed.

What does Elliott wave theory say? The correction is a 4th wave, and given the small magnitude of the correction so far, I think the movement we’re seeing are subwaves smaller than Bitsy degree, the largest degree within the correction, wave 4 of Subminuscule degree. As I’ve noted before, establishing which degree is being tracked early in the game is a guess at best. The proper degree will become apparent as the market movement continues.

Here’s what Elliott has to say about 4th waves: They alternate in form with 2nd waves; in this case the 2nd wave was a Zigzag, and so this correction is most likely a Flat, or perhaps a Triangle or a combination of forms. A 4th wave is never moves beyond the end of the 1st wave, which was 4365 in this case. A 4th wave generally ends within the 4th subwave of the 3rd wave of the same degree.

In this case, that’s wave 4 of Bitsy degree within wave 3 of Subminuscule degree, which I’ve marked on the chart with a circle. Bitsy wave 4 within the 3rd wave ranges from 4469.50 down to 4436.25, suggesting that the present correction, wave 4 of Subminuscule degree, has 100 points of downside potential, more or less,

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, October 25, 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

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 at 4551.50 on the futures, 4559.67 on the index, and then immediately withdrew by 36 points on the futures, bouncing up again in a clear corrective pattern of very small degree. The price so far remains below the peak. I’ve marked the upper, near-term chart based on a scenario that peak marked the end of wave 5 of Subminuscule degree. That scenario makes the 3rd the shortest wave, followed by the 5th and then the 1st. This meets the strict Elliott wave analysis rule that the 3rd wave cannot be the shortest wave in the direction of the trend. If events prove 4551.50 to not be the end of Subminuscule 5, then I’ll reanalyze the chart. Upper chart updated.

10:45 a.m. New York time

New all-time high. The S&P 500 E-mini futures moved to an all-time high of 4551.50 so far, exceeding the September 3 peak of 4549.50. This follows the index, which set a new peak yesterday.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to rise during the night, reaching 4548, which is 1.50 below the September 3 high. The S&P 500 index exceeded the early September high in yesterday’s trading.

What does it mean? The rise that began on October 13 continues and is in its last leg. When the rise is complete, it will be followed by a shallow correction and then a rise to new heights.

What’s the alternative? The chart is unambiguous at this point and I have no alternative analysis. Ambiguities can develop at any time.

Two charts. The upper chart is a shorter-term chart, showing movement beginning with the September 3 high. The lower chart is a longer-term chart tracing the early pandemic crash and the rise that followed.

What does Elliott wave theory say? Shorter-term chart: The rise that began October 13 is wave 3 of Subminuscule degree, and internally, it is in its 5th and final wave, of Bitsy degree. Subminuscule 3 is the middle wave within wave 5 of Minuscule degree, which is the final wave within wave 1 of Submicro degree, which began on October 1 from 4260. Submicro 1 will be followed by a sharp downward correction, retracing much of the rise from October 1, and then by a 3rd wave reaching new heights, a shallow 4th wave correction, and a 5th wave, likely going still higher, that will complete the parent wave 4 of Micro degree, which began May 13.

Micro degree is the smallest movement I’ve labelled on the long-term chart. It is the final wave within, in ascending order, 5th waves of Subminuette, Minuette and Minute degrees, and when Minute 5 is complete, it will also mark the end of wave 3 of Minor degree, which began on February 23 from 2191.86, the end of the early pandemic crash.

Longer-term chart: All of that is happening within Intermediate wave 5, which began in December 2018 and is taking the form of an expanding Diagonal Triangle, meaning the price reversal boundaries are moving further apart from each other day by day.

Minor wave 3 will be followed by Minor wave 4, which will carry the price to the lower boundary of the Diagonal Triangle, which is in the 2050s at this point but will be far lower by the time the price reaches it. After Minor wave 4, the price as Minor wave 5 will again return to the upper boundary completing the parent, wave 5 of Intermediate degree, which will be followed by a downward correction of epic proportions.

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, October 22, 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

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.

4 p.m. New York time

At the closing bell. Three minutes before the closing bell the S&P 500 index rose above the September 3 high of 4545.85, reaching a new peak of 4551.44. The S&P 500 futures remained below the September 3 high. This has no effect on my analysis.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 climbed during the day to 4537.50, exceeding yesterday’s high but remaining below the September 3 all-time high of 4549.50. I’ve updated the chart, adding a dotted line at the level of the September 3 peak.

9:55 a.m. New York time

What’s happening now? The S&P 500 E-mini futures stayed below yesterday’s high, 4532.25, in overnight trading.

What does it mean? The rise that began October 1 is still rising but nearing the end of its middle leg, which will be followed by a shallow correction and then a move to new highs. .

What’s the alternative? Or, possibly, the price will reach above the previous peak, 4549.50 attained on September 3, before the shallow correction begins. The uncertainty lies in how much energy the rise from October 1 still has in it.

What does Elliott wave theory say? The rise from October 1 is wave 5 of Minuscule degree within wave 3 of Submicro degree. Within Minuscule 5, from larger to smaller, the price is tracing wave 3 of Subminuscule degree, its child wave 5 of Bitsy degree, and — unlabelled on the chart — its grandchild, wave 5 of Subbitsy degree. I’m less certain of the Subbitsy count, and indeed, yesterday’s high may in fact be the end of Subitsy 5, Bitsy 5 and Subminuscule 3, and the beginnging of the 4th wave of Subminusule degree, a shallow 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.

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 21, 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

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. Today’s high of the day remains at 4532.25. No change to the morning analysis and the 1:55 p.m. update. I’ve updated the chart.

1:55 p.m. New York time

Approaching a new high. The S&P 500 is approaching the all-time high it set on September 3. The present high so far today is 4532.25 on the futures The September 3 futures peak was 4549.50.

There is nothing in the rules of Elliott wave analysis that forbids the present rise from exceeded the September 3 peak. The S&P 500 is present in wave 5 of Micro degree; the September 3 peak was wave 3 of Micro degree. It is normal and expected for the 5th wave to exceed the prior 3rd wave of the same degree. So what we’re seeing in the markets today is business as usual.

On the other hand, there is nothing that requires the present 3rd wave of Subminuscule degree to exceed the September 3 high, which is three degrees larger. So today may not be the day the price hits a new high. No guarantees, either way.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures traded below yesterday’s high, 4517.50, in overnight trading, rising back to that price minutes after the opening bell this morning.

What does it mean? The pause in the rise is a shallow correction within middle leg of an uptrend that began on October 12. The pause will be followed by a resumption of the uptrend.

What’s the alternative? At this point the chart has a great deal of clarity and I have no alternative analysis. As always, price movements can turn ambiguous at any moment.

What does Elliott wave theory say? The present sideways movement is wave 4 of Subbitsy degree within wave 5 of Bitsy degree within wave 3 of Subminuscule degree. Fourth wave corrections tend to be shallow, and this very low degree 4th wave is following the pattern.

The end of Bitsy 5 will also be the end of the parent, Subminuscule 3, which will be followed by a Subminuscule 4th wave correction two degrees larger than Subbitsy. Afterward, wave 5 of Subminuscule degree will begin, pushing higher, where its completion will also end the parent, wave 5 of Minuscule degree and the grand-parent, wave 1 of Submicro degree.

With the end of Submicro 1, things start to get interesting. Submicro 1 and its parent wave, Micro 5, began on October 1 from 4269. Submicro 1 will be followed by a 2nd wave correction, and 2nd waves tend to retrace a great deal of the preceding 1st wave. So with wave 2 of Submicro degree I’m expecting the price to fall back in to the region of Submicro wave 1’s beginning — the upper 4200s or, if the correction stops short, perhaps the lower 4300s.

Following the 2nd wave correct, the uptrend will resume, in the form of an energetic wave 3 of Submicro 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, October20, 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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