3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 rose through the day, as wave C within wave 2 of Subbitsy degree continued. No change in the analysis. Chart updated.

10 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to rise in overnight trading, reaching a high so far today of 4135.

What does it mean? Continuation of the rise situates the S&P 500 in the middle wave of a three-wave correction to the upside.

What’s the alternative? If the price should rise above the May 9 high of 4238.25, then the decline that ended on May 13 was a downward correction and the rise that began on months earlier is continuing.

What does Elliott wave theory say? By my principle analysis, the wave 2 of Subbitsy degree correction that began on May 13 has completed its first internal wave A to the upside and its second, wave B to to the downside. The present rise is wave C to the upside. Second waves typically are simple Zigzags, so the completion of wave C will likely end Subbitsy wave 2 and mark the start of Subbitsy wave 3, an energetic move to the downside. This is all happening within the 1st wave of Bitsy degree and higher, the first tentative steps of a significant downtrend.

By my alternative analysis, the decline that began on May 9 is a continuation of a 4th wave correction within wave 5 of Minuette degree, which began on March 4.

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3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 E-mini futures fell to 4055.50 and then reversed, rising slightly. The B-wave low was was beyong a 79% retracement of the preceding A wave within the wave 2 of a Bitsy degree upward correction that began on May 13. B waves in a Zig-zag pattern tend to retrace no more than 79%, but it’s a guideline, not a firm rule. The rapid retreat from the low suggests that upward wave C within Bitsy wave 2 has begun, although it’s not a certainty.

“Nothing is but what is not.” –William Shakespeare, “Macbeth” (1605).

10 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to decline, reaching into the 4060s in overnight trading, more than 100 points below the May 18 peak of 4179.30

What does it mean? The lower the price goes, the stronger the argument that the upward correction that began from 4029.25 on May 13 has ended, and the middle leg of the downtrend that began on May 9, from 4238.25, has begun. The price remains above 4029.25, the end of the 1st leg of the downtrend. A decline below that level confirm that the upward correction has ended.

What’s the alternative? Until then, the possibility remains that the upward correction is still underway and the price will resume its rise, moving above 4179.30, the peak attained on May 18.

What does Elliott wave theory say? By my principle count, wave 2 of Bitsy degree is still underway, with the decline from May 18 being wave B within wave 2.

B waves tend to retrace no more than 79% of the preceding A wave, which in this case would put the maximum retracement at 4060.75 on the futures. The low so far today has been 4061. So if the principle count is correct, a C wave to the upside has begun or will be beginning soon.

Under the alternative count, the decline from the May 18 peak is wave 3 of Bitsy degree. Third waves tend to be the most energetic of a trend, and wave 3 will carry the price below the end on May 13 of the the preceding wave 1 of Bitsy degree. A move below below 4029.25, the end of wave 1, will confirm that the alternative count is correct and wave 3 is underway.

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3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 continued to meander quietly within a narrow range, staying below the overnight high. No change to the analysis. Chart updated.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures reached a new high in overnight trading — 4179.50 — less than a point above Monday’s high.

What does it mean? The upward correction that began on May 13 continues and may with the overnight high have reached its peak.

What’s the alternative? … or perhaps 4179.50 isn’t the peak. The upward correction is within a larger downtrend and is within the rules of Elliiott wave analysis as long as the price remains below the start of the downward, 4238.25 on May 9. It’s also possible that the downtrend that began on May 9 is a correction within an ongoing uptrend, which would become the principle analysis should the price move above 4238.25.

What does Elliott wave theory say? The upward correction is wave 2 of Subbitsy degree within wave 1 of Bitsy degree, the very early subwaves of the downtrend that began May 9. Subbitsy wave 2 will be followed by a 3rd wave that will carry the price below 4029.25, which is where Subbitsy 2 began.

Elliott wave rules forbid a 2nd wave moving beyond the beginning of the previous 1st wave of the same degree, in this case a move above 4238.25. If that were to happen, then the downtrend would be seen as a downward correction within an ongoing uptrend, wave 5 of Minuette degree, which began on October 30, 2020 from 3225.

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3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 barely budged throughout the day, remaining below the overnight high of 4178.75. No change to the analysis. Chart updated.

9:40 a.m. New York time

What’s happening now? The S&P 500 E-mini futures drifted higher, to 4178.75, when trading resumed Sunday evening and continued to trade slightly below that level

What does it mean? The overnight high might mark the end of a correction that began on May 13. The correction will be followed by an energetic movement to the downside, reaching below 4029.25, the correction’s starting point.

What’s the alternative? The Sunday evening high and small decline might well be a pause in the correction, which will continue higher.

What does Elliott wave theory say? The correction is wave 2 of Subbitsy degree, an early small-degree portion of a larger correction to the downside that began on May 9 from 4238.25. Subbitsy 2 will be followed by a declining Subbitsy wave 3. Third waves tend to be quite energetic, so I’m looking for a bit of drama when that wave 3 kicks in.

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11:15 p.m New York time

What’s happening now? Dogecoin fell from its May 6 high of 0.6848, reaching a low of 0.3854 on May 11 and then bouncing back up, so far today having reached a high of 0.5402.

What does it mean? By my principle count, the decline is in the middle leg of a correction that will be followed by a declining third leg, and then either another corrective pattern or a rise above the May 6 high.

What’s the alternative? Rather than being a correction, the decline from May 6 is the start of a downtrend, with further decline to come.

What does Elliott wave theory say? I chose a correction as my principle analysis because the decline from May 6 to May 11 came in three waves, in the form of a Flat. A downtrend would have five waves, as would a Zigzag correction. The degree subscripts are arbitrary and don’t represent an analysis of Dogecoin’s full history.

The rise from May 11 is a B wave by my principle analysis. B waves often — not always — will retrace a significant portion of the A wave decline.

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3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 continued its rise today, reaching 4178.25 on the E-mini futures and 4183.13 on the index. No change in the analysis. Chart updated.

9:50 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight from yesterday’s low of 4029.25.

What does it mean? My principle analysis sees the bounce as an upward correction within a downtrend, both of small degree. The rise might well retrace most of the decline from the May 9 high of 4238.25. These small moves are happening within a far larger downtrend.

What’s the alternative? If the price moves above the May 9 high, then the alternative analysis comes into play, seeing the decline from May 9 as a small correction within a larger uptrend.

What does Elliott wave theory say? By my principle count, the decline from the May 9 high is wave 1 of Bitsy degree, the first small step of a very large downtrend. Within Bitsy 1, yesterday’s low marked the end of wave 1 of Subbitsy degree and the beginning of Subbitsy 2. Second waves often retrace much of the preceding first wave. The upward correction will be followed by further decline, in an energetic wave 3 of Subbitsy degree.

By my alternative count, the decline from May 9 is a very low level A wave correction, which will be followed waves B and C, and perhaps be extended in a compound structure before resuming the rise and exceeding the May 9 high.

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3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 hit a low of 4029.25 on the futures, 4056.88 on the index, and turned up in what I count as a very low degree 2nd wave correction to the upside, perhaps at Subbitsy degree, within a 1st wave downtrend one degree higher, perhaps at Bitsy degree. I’ve updated the chart below. No change in the analysis.

2 p.m. New York time

My trades. I’ve exited my bear call options spread on XBI for 50% of maximum potential profit. The updated analysis can be seen here.

9:40 a.m.New York time

What’s happening now? The S&P 500 E-mini futures continued a halting decline, reaching a low overnight of 4029.25.

What does it mean? The decline that began on May 9 from 4238.25 on the futures, 4238.04 on the index, remains in its early stages. Like all market movements, it is a combination of rises and falls of ever-smaller degrees. By my principle analysis, the main line of movement within all of those fluctuations will be net down.

What’s the alternative? If the price reverses and moves above the May 9 high, then the rise that began March 4 from 3720.50 is still underway. By my alternate analysis, the main line of movement within the fluctuations would be net up.

What does Elliott wave theory say? The peak of May 9 marked the end of upward-trendingwave 5 of Minuette degree, which began on March 4. The decline that followed is a small degree wave 1, perhaps of Bitsy degree, in a new downtrend all the way up to Minuette degree. That downtrend is the initial stage of wave A of Minute degree within wave 4 of Minor degree, which will take months to play out.

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3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 continued its decline, slipping from the low 4100s to around 4060, in the initial wave of a downtrend that began on May 9. I’ve updated the chart.

9:40 a.m. New York time

What’s happening now? The S&P 500 E-mini futures moved slightly lower in overnight trading, to 4095.50.

What does it mean? Yesterday’s analysis stands: The May 9 peak, 4238.25, ended the uptrend that began March 25 and kicked off a significant downward correction.

What’s the alternative? If the price reverses and moves above 4238.25, then the uptrend that began March 25 is still underway. The correction will eventually come, but a new high would move it down the road.

What does Elliott wave theory say? Under the principle analysis, we are seeing the 1st wave of Bitsy degree with a series of higher-degree 1st waves within an A wave of Minute degree. The whole unfolding structure is a 4th wave of Minute degree.

Under the alternative analysis, which becomes valid only if the price reverses to a new high, the present decline would be a small-degree downturn within uptrending wave 3 of Minor degree.

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3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 spent much of the day trading in a narrow range, in the low to mid 4100s. I’ve updated the near-term chart. The analysis remains unchanged.

10:25 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell sharply overnight, creating an opening gap on the S&P 500 index.

What does it mean? The power of the decline was sufficient to cast doubt on my analysis treating the May 9 of 4238.25 peak as part of an ongoing rise. The peak appears to have completed the uptrend that began on March 4 from 3720.50. A new downtrend has begun.

What’s the alternative? A sharp reversal to the upside and a new high would require another major re-analysis based on the premise that the rise from March 4 is still underway.

What does Elliott wave theory say? The rule that forced the recount is this: Wave 4 can’t move beyond the start of wave 1. If the analysis shows that happening, then it’s not a 4th wave.

In my recount, I see March 4 as marking the end of wave 4 of Minuette degree and the beginning of the 5th and final wave up of Minuette degree. It is that 5th wave that ended on May 9.

The May 9 peak also marks the end of a series of larger waves: Wave 5 of Minute degree within wave 3 of Minor degree. Minor degree 3 began on February 23, 2020 from 2191.86, the end of the crash early in the pandemic.

What follows will be a 4th wave correction at the Minor degree that will play out over the next few months. I’ve marked the initial decline from the May 9 peak as wave 1 of Bitsy degree, although at this point that’s a guess. It is the first movement down of wave A of Minute degree within wave 4 of Minor degree.

Here’s a big-picture chart looking back to 2018.

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3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 declined sharply from the May 9 peak of 4238.25, suggesting that wave 3 of Bitsy degree is complete, and a wave 4 downward correction has begun. I’ve updated the chart.

9:50 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose slightly in overnight trading, to 4238.25, and then pulled back a little.

What does it mean? The uptrend that began May 4 from 4120.50 is still underway and may have completed the middle leg of its rise. The pattern suggests that there is still more upside ahead.

What does Elliott wave theory say? The rise from May 4 is wave 1 of Bitsy degree within wave 5 of Subminuscule degree. This is happening within wave 5 of Minuscule degree, which began on April 7 from 4056.50. Bitsy wave 1 will be followed by a downward wave 2 correction, probably a sharp one, and then an energetic 3rd wave rise, a shallow 4th wave downward correction, and a final 5th wave push to new highs, completing wave 5 of Subminuscule degree, its parent wave, 5 of Minuscule degree, and its grandparent wave, 3 of Submicro degree.

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