Trader’s Notebook

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 traded within a narrow range in the upper 3700s during the session, remaining in the neighborhood of the lower boundary of the target price range for the rise that began on June 17. Wave C{-12} within an upward correction, wave 4{-11}, is still underway. I’ve updated the chart.

12:40 p.m. New York time

FDX earnings play entry. I’ve entered a short bull put vertical spread on FDX, using options that trade for the last time on July 15, and have posted an analysis of the trade.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell and rose again in overnight trading, staying within a fairly narrow range at the lower boundary of the target price range of the rise that began on June 17. The target range is marked on the chart by dashed lines.

What does it mean? The third and likely final segment of the upward correction that began on June 14 is still underway. Internally, the segment will have five subwaves and is now nearing completion the 3rd wave.

What are the alternatives? There are two.

Alternative #1: It’s possible that yesterday’s peak, 3805.50, was the end of the correction and the subsequent decline, the resumption of the downtrend that began on June 2.

Alternative #2: Or, 3805.50 may have ended the first three-wave corrective pattern within a compound correction, which strings together two or three corrective patterns.

[S&P 500 E-mini futures at 3:30 p.m., 160-minute bars, with volume]

What does Elliott wave theory say? Under the principal analysis, yesterday’s peak, 3805.50, is the end of wave 5{-14} within wave 3{-13} within the third segment, C{-12}, of the upward correction, 4{-11} that began on June 14. The subsequent decline is part of wave 4{-13}.

Under the first alternative analysis, yesterday’s high is the end of the upward correction, wave 4{-11}, and the subsequent decline is a first tentative step in wave 5{-11}, which resumes the downtrend.

Under the second alternative analysis, wave 4{-11} is forming a compound structure. Yesterday’s high ended wave C{-12}, but the the parent, wave 4{-11}, is still underway. The decline off of that high is the beginning of wave X{-12}, connecting the first corrective pattern with a second one that is yet to come.

Whichever scenario plays out, when wave 5{-11} ends, it will also mark the end of the larger downtrending wave 3{-10}, which began on June 2, within wave 5{-9}, which began on May 30. When wave 3{-10} is complete, it will be followed by an upward correction, wave 4{-10}, which will be larger than the present wave 4{-11} upward correction.

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)
  • 1{-6} Submicro, 1/4/2022, 4808.25 (down)
  • 5{-7} Minuscule, 3/29/2022, 4631 (down)
  • 5{-8} Subminuscule, 4/21/2022, 4509, (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, June 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
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Trader’s Notebook

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 has risen during the session, returning to the upper 3700s on the futures. The rise can be counted as wave 5{-13}, the final wave within wave C{-12}, which in turn is the final wave within the wave 4{-11} upward correction, which began on June 14. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell in overnight trading, returning to the low 3700s.

What does it mean? The downward movement is the fourth of five segments within the final rise of an upward correction that began on June 14. When that final rise is complete, the downtrend that began on June 2 from 4189 likely will resume, unless the correction forms a compound structure linking several corrective patterns together.

What is the alternative? The upward correction is small in comparison with the larger downtrend that it is correcting. That raises the possibility that the correction is of a lower degree than I’ve it on the chart.

[S&P 500 E-mini futures at 3:30 p.m., 160-minute bars, with volume]

What does Elliott wave theory say? The upward correction is wave 4{-11} within a downtrend, wave 3{-10}. Within the 4th wave, the last of three waves, C{-12}, is underway. The C wave will have five internal waves. By my principal count, the 5th wave — wave 5{-13} — is now in progress.

Wave 4{-13} will be followed by the final wave in the corrective pattern, rising wave 5{-13}, whose end point will also mark the end of the parent, wave C{-12}, and perhaps of the upward correction, wave 4{-11}. I’m hedging the end point of wave 4{-11} because it’s possible that the correction will form a compound structure, containing two or three corrective patterns, each separated by a connector, wave X.

In any case, once wave 4{-11} is complete, wave 5{-11} will begin, a downtrending wave that is the final segment of wave 3{-10}, a downtrend that began on June 2.

My alternative analysis recognizes the possibility that what I’ve called wave 4{-11} is actually one degree small, wave 4{-12}. The A wave within 4{-11} is only 134.50 points long, and the entire upward correction so far is only 204 points long — low to high. By contrast, the preceding downtrending wave, 3{-10}, is 481 points long from its starting point to the presumed start of wave 4{-11}. It doesn’t break any rule of Elliott wave analysis, but it’s a weak correction.

On the other hand, the high point of 4{-11} so far is within the 4th subwave of wave 3{-11}, which precedes it, and that’s one of the tendencies of 4th waves identified in Elliott wave theory.

All of this is happening within wave 5{-9}, which began on May 30, within wave 5{-8}, beginning on April 21, within 5{-7}, beginning on March 29, within wave 1{-6}, which began on January 4.

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)
  • 1{-6} Submicro, 1/4/2022, 4808.25 (down)
  • 5{-7} Minuscule, 3/29/2022, 4631 (down)
  • 5{-8} Subminuscule, 4/21/2022, 4509, (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, June 22, 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
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Trader’s Notebook

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 continued to rise to the session, reaching the high 3700s on the futures. Wave C{-12} continues its upward course, within an upward correction, wave 4{-11}. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose in overnight trading, returning to the mid-3700s.

What does it mean? The final leg of an upward correction that began on June 14 has begun.

What are the alternatives? But where should the correction’s inner structure be placed in regard to the correction itself? I’ve labeled the inner structure as one size below the correction. It may be smaller. More on this in the Elliott wave theory section, below.

[S&P 500 E-mini futures at 3:30 p.m., 160-minute bars, with volume]

What does Elliott wave theory say? Under the principal analysis, the June 17 low, 3639, marked the end of downward wave B{-12} within an upward correction, wave 4{-11}. Rising wave C{-12} is now underway.

The wave 4{-11} correction is taking the form of a Flat — three interior waves, with A having three subwaves; B, three subwaves; and C, five subwaves (3-3-5). In a Flat, C waves tend to be 100% to 165% as long as the preceding A wave. Wave A{-12} was 134.50 points long, and so the price target for wave C{-12} is between 134.50 points and 221.93 points above the C wave starting point, 3639. This gives a price target range of 3773.50 to 3860.93.

I’ve marked the lower and upper price target limits on the chart with dashed lines.

Under the alternative analysis, wave C{-12} is relabeled as wave C{-13}, the 3rd and final wave within wave A{-12}, which began on June 14. Basically, this pushes the the A-B-C pattern of the principal analysis one degree lower.

Wave 4{-11} is the next-to-the-last wave within downtrending wave 3{-10}, which began on June 2 from 4169. When complete, wave 5{-11} will carry the price down further, perhaps to a significant degree.

Wave 3{-10} is a subwave of wave 3{-9}, which began on May 4, within wave 5{-8}, which began on April 21 from 4509, within wave 5{-7}, which began on March 29 from 4631, within wave 1{-6}, the initial wave of a large downtrend that began on January 4 from 4808.25.

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)
  • 1{-6} Submicro, 1/4/2022, 4808.25 (down)
  • 5{-7} Minuscule, 3/29/2022, 4631 (down)
  • 5{-8} Subminuscule, 4/21/2022, 4509, (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, June 21, 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
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Trader’s Notebook

10:50 a.m. New York time

What’s happening now? The S&P 500 E-mini futures traded in a narrow range during overnight trading and into the Juneteenth holiday in the United States. U.S. stock and bond markets are closed for the holiday. The price has fluctuated narrowly so far, with a range covering slightly less than 50 points.

What does it mean? The declining middle leg of a short-term upward correction that began on June 14 is underway. It will be followed by a rising final wave that will complete the corrective pattern — a Flat — and most likely the entire correction. Afterward, the downtrend that began on June 2 will resume.

What are the alternatives? As usual, there’s a bit of ambiguity in where each movement fits within the fractal structure of market movements. Lower degree? Higher degree? It’s often hard to say. So Friday’s low, 3639, could well mark the end of the middle leg of the correction. A strong push to the upside will increase the odds that the final leg is underway.

[S&P 500 E-mini futures at 10:50 a.m., 150-minute bars, with volume]

What does Elliott wave theory say? The correction is wave 4{-11} within wave 3{-10}. The decline that began on June 15 from 3843 is wave B{-12} within that 4th wave Flat correction. Wave B{-12} will be followed by wave C{-12} to the upside. C waves typically are 100% to 165% as long as the preceding A wave, which covered 134.5 points.

This is all happening within wave 5{-9}, which began on May 30 from 42.02.25; within wave 5{-8}, which began on April 21 from 4509; within wave 5{-7}, which began on March 29 from 4631. All of those parent waves are downtrending.

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)
  • 1{-6} Submicro, 1/4/2022, 4808.25 (down)
  • 5{-7} Minuscule, 3/29/2022, 4631 (down)
  • 5{-8} Subminuscule, 4/21/2022, 4509, (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, June 20, 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
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Bitcoin Analysis

5:25 p.m. New York time

What’s happening now? USD/BTC continued the sharp decline that began on on May 31 from 32,455, reaching 20,025 on the Bitcoin futures as evening approached in the eastern United States.

What does it mean? The decline is the final segment of a larger downtrend that began on March 28 from 48,575. When the present decline completes the larger downtrend, it will be followed by an upward correction that likely will carry the price back up to the 25,300s and perhaps as high as the 32,400s. The upward correction will be followed by a resumption of the downtrend that will carry the price back to the low 20,000s and perhaps significantly lower.

What’s the alternative? The big unknown on this chart is timing. The decline from March 28 to the present has taken 81 days. The upward correction that followed could be significantly shorter or longer, and that uncertainty is also true of the decline that will follow the correction.

[USD/BTC futures at 5:25 p.m., daily bars, with volume]

What does Elliott wave theory say? The sharp decline that began on May 31 is downtrending wave 5{-4} within downtrending wave 3{-3}. The 5th wave is the final subwave of the parent 3rd subwave. Fifth waves have no limits. They can be surprisingly short or incredibly long, and every other variant in between. Under the rules of Elliott wave analysis, there’s no way to judge just how bad the losses will be going forward.

The end of wave 5{-4} will also complete wave 3{-3}, which will be followed by an upward correction, wave 4{-4}. Fourth waves tend to form a three-wave Flat pattern. In a Flat, waves A and B each have three subwaves, and wave C has five subwaves.

A 4th wave tends to end in the 4th subwave within the preceding 3rd wave. On the Bitcoin chart that would be wave 4{-4} of wave 3{-3}, which began on May 12 at 25,350 and reached a peak on May 31 of 32,455. I’ve used the hedge-word “tends” because that target price range is a tendency, not a firm rule of Elliott wave theory. Things could go quite differently.

With the beginning of the 4th wave the uncertainties mount. For example, the correction can take different forms, such as a Zigzag or a variety of Triangle, each with its own subwave counts. It can string together two or three corrective patterns, stretching the time taken by the correction.

Long story short: If wave 4{-3} is typical, the largest recovery we an expect will carry the price up to 32,455, more or less.

Looking further ahead, the bad expectation is that wave 4{-3} will be followed by a larger downtrending 5th wave than the present one. Wave 5{-3}, which will carry Bitcoin to new lows.

The good expectation is that the completion of wave 5{-3} will likely mark the end of wave C{-2}, which began on November 10, 2021 from 48,575, and the C wave’s parent, wave 4{-1}, a massive downward correction that began on April 14, 2021 from 65,520.

Note that I’ve used another of those annoying hedge-words, another “likely”. It’s possible that wave 4{-1} will form a compound structure, containing two or three corrective structures.

Wave 4{-1} will be followed by an uptrend, wave 5{-1}, which is likely to carry the price above 65,520, and perhaps significantly higher. As I noted earlier in this discussion, 5th waves sometimes come up short — “truncation” in the terminology of Elliott wave analysis. If this should happen, then wave 5{-1} will end below 65,520.

Bottom line: The present decline will be followed by a rise, but it is likely to be shallow, perhaps reaching only the low 32,000s. It will be followed by a soul-crushing decline that will burn any optimism out of the Bitcoin market. But if the rules of Elliott wave analysis hold true, ultimately, almost certainly years down the road, Bitcoin will recover.

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.

  • Futures:
  • 5{0} Intermediate, 12/14/2018, 3,120 (up)
  • 4{-1} Minor, 4/14/2021, 65,520 (down)
  • C{-2} Minute, 11/10/2021, 69,355 (down)
  • 3{-3} Minuette, 3/28/2022, 46,550 (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, June 17, 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
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Trader’s Notebook

Markets closed on Monday. U.S. markets will be closed on Monday for the Juneteenth holiday. Often the S&P 500 E-mini futures will trade overnight on holidays, and if that’s the case for Juneteenth, then I shall post an analysis in the morning.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 fell during the session, reaching 3639 on the futures before rising slightly. This morning’s alternative analysis is now the new principal analysis: Downward wave B{-12} within an upward correction, wave 4{-11}, is still underway, on the third day after it began. Internally, wave B{-12} is in its 3rd and final leg. I’ve updated the chart.

11:20 a.m. New York time

Alternative analysis proven correct. The S&P 500 fell below Thursday’s low on the futures, 3708.50, to 3639. This validates the alternative analysis: Wave B{-12} to the downside is still underway, and wave C{-12} has not yet begun. I’ve updated the chart, changing the wave labels and removing the wave C{-12} price target lines.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures reversed to the upside in overnight trading, rising from the mid-3600s back into the upper 3600s.

What does it mean? Yesterday’s low was 8.5 points below the price target for the decline that began on June 15, strengthening the argument that the subsequent rise was the beginning of a small upward correction of the decline that ran from June 2 to June 16. The rise will likely move above the June 15 high of 3843 and could move above 4000.

What are the alternatives? The overnight rise hasn’t gone far, and it’s possible that it is a still smaller correction within the downtrend rather than correcting the June 2 to June 16 decline.

[S&P 500 E-mini futures at 3:30 p.m., 150-minute bars, with volume]

What does Elliott wave theory say? Under the principal analysis, the overnight law was the end of wave B{-12}, the middle wave of a Flat corrective pattern within the parent wave 4{-11}. The subsequent rise is the beginning of wave C{-12}. Under the Elliott wave guidelines, a C wave tends to retrace 100% to 165% of the preceding A wave. Wave A{-12} was 134.50 points long, giving a price target range of 3843 to 4064.93. I’ve marked the C-wave target range on the chart with gray dashed lines. I’ve retained the B-wave target, 3650.49, as a blue dashed line.

Under the alternative analysis, wave B{-12} is still underway, and the overnight rise is the start of wave B{-13}, the middle of three subwaves within B{-12}.

If the price continues to rise, then the principal analysis becomes more likely. If the price falls below 3708.50, then the alternative analysis is correct.

All of this is happening within wave 3{-10} within wave 5{-9}, a subwave of wave 5{-8} within wave 5{-7}, which began on March 29 from 4631.

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)
  • 1{-6} Submicro, 1/4/2022, 4808.25 (down)
  • 5{-7} Minuscule, 3/29/2022, 4631 (down)
  • 5{-8} Subminuscule, 4/21/2022, 4509, (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, June 17, 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
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Trader’s Notebook

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures has fallen to the 3640s during the session, below the likely target price of wave B{-12}, 3650.49. Wave B{-12} is the middle of three waves in a Flat corrective pattern. When complete, it will be followed by a rise, wave C{-12}. The parent waves — upward correction wave 4{-11} within downtrending wave 3{-10} within downtrending wave 5{-9} — are stilll undeerway.

No change in the analysis. I’ve updated the chart.

11:05 a.m. New York time

How far down is down? I’ve updated the chart with a dashed line at 3650.49 showing the likely maximum decline of wave B{-12}, the middle segment of the upward correction now underway. Elliott wave theory says that B waves in a Flat pattern tend to retrace 100% to 138% of the preceding A wave, and the price on the futures have almost hit the 138% retracement mark.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures, having risen 134.5 points on Thursday, resumed its downtrend overnight, falling 148 points from the prior session’s high.

What does it mean? The rise was the first segment of an upward correction within the larger downtrend that began on June 2, and the subsequent decline was the second segment of that correction.

What are the alternatives? The rise completed the upward correction and the final segment of the larger downtrend is underway. I think this is unlikely because the upward movement was uncommonly shallow, retracing only 28% of the decline that began on June 2. I would expect a greater retracement. Yet, this scenario isn’t impossible.

[S&P 500 E-mini futures at 3:30 p.m., 180-minute bars, with volume]

What does Elliott wave theory say? Yesterday’s upward correction is wave 4{-11} within wave 3{-10}, which began on June 2. Fourth waves usually form a Flat pattern, and downward wave B of a Flat can move below the end of the preceding 3rd wave. My principal analysis is based on that scenario. We can expect the B wave to be followed by an upward C wave that will complete the Flat pattern. When wave 4{-11} has reached completion, wave 5{-11} will carry the price down, perhaps by a significant distance, and will complete the parent wave 3{-10}.

The alternative analysis accounts for a scenario in which yesterday’s rise was the entirety of wave 4{-11}, and wave 5{-11} to the downside is now underway. As noted in the Alternative section, I think this scenario is unlikely.

If the price reverses quickly and exceeds yesterday’s high, 3843, the movement will confirm the principal analysis. If the price keeps falling in the five-wave pattern that’s normal for a trend, then the alternative analysis will be confirmed.

This is all happening within downtrending wave 5{-9}, which began on May 30 from 4202.25 and is the final wave within downtrending wave 5{-8}, which began on April 21 from 4509.

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)
  • 1{-6} Submicro, 1/4/2022, 4808.25 (down)
  • 5{-7} Minuscule, 3/29/2022, 4631 (down)
  • 5{-8} Subminuscule, 4/21/2022, 4509, (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, June 16, 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
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Trader’s Notebook

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 has traded has within a small range during the session, the futures covering a bit more than 100 points between the low 3800s and the low 3700s. The price has stayed above yesterday’s low, 3708.50. No change in the analysis. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose back into the high 3700s in overnight trading.

What does it mean? The rise was a low-level correction within the larger downtrend that began on May 30, within a series of downtrends of increasing size. See yesterday’s Trader’s Notebook for a description of the larger movements defining this market.

What are the alternatives? Any pause in the decline potentially marks the end of a segment within the larger downtrend and the beginning of an upward correction. See the Elliott wave theory section, below, for a discussion.

[S&P 500 E-mini futures at 3:30 p.m., 155-minute bars, with volume]

What does Elliott wave theory say? Wave 3{-10}, now underway, is the middle segment of wave 5{-9}, the downtrend that began on May 30 from 4202.25.

The power of the wave 3{-10} decline is such that the wave count internally has ambiguities. It’s possible that any pause, such as the one overnight, marks a transition to wave 4{-10}, an upward correction, and then perhaps a decline, wave 5{-10}, whose completion will mark the end of wave 4{-9}. I intend to retain the present analysis until there’s a clear sign that wave 4{-10} has begun.

The Federal Open Market Committee issues its money policy statement today at 2 p.m. New York time, which may create a disturbance on the chart. Nonetheless, the rules of Elliott wave analysis will remain in place, and the wave count will need to follow those rules in accounting for traders’ responses to the FOMC’s decisions.

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)
  • 1{-6} Submicro, 1/4/2022, 4808.25 (down)
  • 5{-7} Minuscule, 3/29/2022, 4631 (down)
  • 5{-8} Subminuscule, 4/21/2022, 4509, (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, June 15, 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
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Trader’s Notebook

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 continued to decline during the session, reaching the low 3700s. No change in the analysis. I’ve updated the upper (near-term) chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to decline in overnight trading, reaching the mid-3700s.

What does it mean? The middle segment within the last leg of a declined that began on April 21 is underway. That smaller, middle segment will be followed by an upward correction, and then a resumption of the downtrend that will end the larger last leg of the decline, also ending an even larger downtrend that began on January 4, which will be followed by a large upward correction, and then an even larger downtrend.

The decline underway since January 4 is still some distance away from its target ending range, 3085.29 to 2691.35. More on this in the Elliott wave section, below the charts.

What are the alternatives? I’ve adjusted sizes of the waves within the downtrend that began on May 30. As is often the case, where a wave fits in the hierarchy of waves is often ambiguous. Details

The Charts. The upper chart — the futures — focuses on the near term and shows the downtrend that began on April 21.

The lower chart — the index — focuses on the long term and shows the rise that began on December 26, 2018, and the the subsequent decline that began on January 4, 2022. The price target range of the present decline is marked by dashed lines on the lower chart.

[S&P 500 E-mini futures at 3:30 p.m., 150-minute bars, with volume]
[S&P 500 index at 9:32 a.m., 2-day bars]

What does Elliott wave theory say? Breaking with my usual practice, I’m going to describe the chart from the larger degrees down to the smaller.

Please refer to the lower chart for the first part of the discussion:

Everything we’ve experienced in the market from December 26, 2018 is within wave 5{0} — the Intermediate degree in the traditional nomenclature. That 5th wave has taken the form of an expanding Diagonal Triangle.

Within the triangle, wave 2{-1} was the early pandemic crash and ended on February 23, 2020. The ensuing rise was wave 3{-1}. It ended on January 4, 2022, the date that also marked the beginning of wave 4{-1}.

Under the rules of Elliott wave analysis, this 4th wave won’t move below the start of wave 1{-1}, 2346.589 on December 26, 2018, and will be longer than wave 2{-1}, which ended on December 23, 2020 at 2191.86, after a journey of 1,201.66 points on the index. Also, a 4th wave in an expanding triangle tends to retrace between 66% and 81% of the preceding 3rd wave.

So, this means that the present wave 4{-1}:

  1. likely will end between 3085.29 to 2691.35 (66% to 81% of wave 3{-1}),
  2. must end below 3616.34 (longer than wave 2{-1}),
  3. and won’t end below 2346.58 (not beyond the start of wave 1{-1}).

Please refer to the upper chart for the second part of the discussion:

Since March 29 wave 5{-7} to the downside has been underway. It contains within it three 5th waves that are underway: Wave 5{-8} began on April 21, and wave 5{-9}, on May 30 from 4202.25. When wave 5{-9} is complete, it will also be the end of 5{-8}, 5{-7} and the parent wave one degree higher, wave 1{-6}, which began on January 4.

Wave 1{-6} will be followed by a 2nd wave upward correction that will correct the decline from the January 1 high. Personally, I’ll be looking at that decline as an opportunity to get out of losing positions in anticipation of what will come afterward; that 2nd wave correction will be followed by wave 3{-6} to the downside, setting new lows within the downtrend that began on January 4.

How close is wave 5{-9} to completion? By my count it is now in its middle segment, wave 3{-10}, which will be followed by an upward correction, wave 4{-10}, and then a push further downward, wave 5{-10}, which will trigger completion of parent waves all the way up to wave 1{-6}.

My take-away from this is the certain knowledge that no trend moves in a single direction. A bear market isn’t the simplistic 20% decline metric used by the financial media. Each downtrend contains smaller downtrends and upward corrections, which in turn contain still smaller downtrends and upward corrections. And each correction includes trends and corrections of its own.

So, in Elliott wave terms, we’ve been in a bear market since January 4, and also since May 30, within a years-long bull market, wave 5{-0}, that is taking the form of an expanding Diagonal Triangle.

Bear markets aren’t as simple as the headlines would have us believe.

Regarding the subwaves of wave 5{-9}: I’ve moved the degree labels up one; what was labeled as wave 3{-11} within wave 1{-10} within wave 5{-9} is now labeled wave 3{-10} within wave 5{-9}, bumping the degree up by one.

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)
  • 1{-6} Submicro, 1/4/2022, 4808.25 (down)
  • 5{-7} Minuscule, 3/29/2022, 4631 (down)
  • 5{-8} Subminuscule, 4/21/2022, 4509, (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, June 14, 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
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

Trader’s Notebook

3:36 p.m. New York time

Less than half an hour before the closing bell. Always embarrassing for a post to be outdated within six minutes. The downtrend that began on June 6 continues. Wave 3{-12} within wave 3{-11} within wave 1{-10} within wave 5{-9} is the location.

3:30 p.m. New York time

Half an hour before the closing bell. The decline that began on June 6 continued during the session, reversing from a low of 3750.50 in a small upward correction that is still underway. The small correction is wave 4{-12} within wave 3{-11} within wave 1{-10} within wave 5{-9}. 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 gapped below Friday’s close when trading resumed overnight. The decline continued, with the price reaching levels not seen since early last year.

What does it mean? The first leg of the decline that began on May 30 continues. Internally, that initial portion of the downtrend is in its middle, most energetic phase. The initial portion of the downtrend will be followed by its first internal correction, an upward move that will remain below 4202.25, the beginning of the downtrend. The first correction in a downtrend often takes back enough of the preceding decline to persuade traders that the bull market has returned, multiplying the shock when the downtrend resumes, as it will.

What are the alternatives? None at this point. The chart shows a straightforward downtrend.

The Chart. I’ve moved in for a close-up view to better understand where we stand within the initial phase of the downtrend. For a broader view of the futures, see Friday’s Trader’s Notebook, and for a still broader view, of the index, see Thursday’s edition.

[S&P 500 E-mini futures at 3:36 p.m., 40-minute bars, with volume]

What does Elliott wave theory say? The downtrend that began May 30 is wave 4{-9}, starting from 4202.25. Internally, it is subdividing in the normal fashion, a series of ever smaller downtrends and correction that illustrate the fractal structure of the market’s movements.

Within wave 4{-9}, wave 1{-10} is underway. The present decline, which began June 10 from 3943.50, is three levels smaller, wave 5{-13}, within wave 3{-12}, which began June 6 from 4861.25, within wave 3{-11}, which began June 2 from 4189.

Third waves are almost always the most energetic, the most dramatic, of all of the waves in a trend, with 5th waves often coming in next. What we see here is a 5th wave set within two 3rd wave, each of higher degree, which explains the energy of the overnight decline.

Wave 1{-9} will be followed by an upward correction, wave 2{-9}, and then by the main event: A dramatic resumption of the downtrend as wave 3{-9} begins.

This is all happening within wave 5{-8}, a larger downtrend that began on April 21 from 4509.

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)
  • 1{-6} Submicro, 1/4/2022, 4808.25 (down)
  • 5{-7} Minuscule, 3/29/2022, 4631 (down)
  • 5{-8} Subminuscule, 4/21/2022, 4509, (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, June 13, 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
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.