DELL Trade

Dell Technologies Inc. (DELL)

Update 11/22/2022: I exited my short bear call vertical spread on DELL, 24 days before expiration, for a $0.90 debit per contract/share, a loss before fees of $23 per contract. Shares were trading at $41.70, up $1.42 from the entry level.

The Implied Volatility Rank at exit was 75.9%, down 1.1 points from the entry level.

I exited on the day after entry because that is my usual practice with earnings plays. Earnings beat analysts’ forecast, and shares rose in response. I exited the position for 49.2% of maximum potential loss.

Shares rose by 3.5% over one day for a +1,287% annual rate. The options position produced a 25.6% loss for a -9,328% annual rate.


I have entered a short bear call vertical spread on DELL, using options that trade for the last time 25 days hence, on December 16. The premium is a $0.67 credit per contract share and the stock at the time of entry was priced at $40.28.

The Implied Volatility Ratio stood at 77%.

Premium:$0.67Expire OTM
DELL-bear call spreadStrikeOddsDelta
Calls
Long45.0091.0%12
Break-even43.1777.0%27
Short42.5063.0%42

The premium is 53.6% of the width of the position’s short/long spread. The profit zone covers a 7.2% move to the upside and an unlimited move to the downside.

The risk/reward ratio is 2.7:1, with maximum risk of $183 and maximum reward of $67 per contract.

How I chose the trade. The trade was placed to coincide with DELL’s earnings announcement, after the closing bell on the day of entry. The short strikes were set to coincide with the expected move of $3.38 either way, based on options pricing, which gives a price range of $37.41 to $43.15. The Zacks Investment Research earnings surprise predictor gave DELL a score of -1.35%, with a rank of 4 (sell). The analysts’ consensus is that DELL will announce earnings of $1.59 per share.

By Tim Bovee, Portland, Oregon, November 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

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 declined during the day, with a gentleness appropriate for a major holiday week in the United States. This morning’s analysis is unchanged. Wave 2{-7} continues to work through its last internal wave, C{-8}. I’ve updated the upper chart.

1:20 p.m. New York time

DELL earnings play entry. I have entered a bear call spread on DELL, using options that expire on December 16, 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 declined slightly after trading resumed overnight, remaining between last week’s high and low: 4050.75 and 3912.50.

What does it mean? An upward correction that began on October 13 from 3502 is in its last stages. The present decline is the next-to-the-last movement within the final wave of the correction. It will be followed by an upward movement that will complete the corrective pattern and most likely will mark the end of the correction as well, unless the correction takes a compound form, containing two or three corrective patterns.

So far the upward correction has peeked above the 61.8% Fibonacci retracement level and since then has traded between the 61.8% and 50% Fibonacci levels. The Fibonacci levels are marked on the upper chart in red.

What are the alternatives? Most corrections contain only one corrective pattern. However, a few form a compound structure, with additional corrective patterns.

In either case. When the upward correction is complete, it will be followed by a powerful downtrend that will carry the price below 3502, almost certainly into the 3400s, and perhaps even lower.

Charts. The upper chart shows the S&P 500 E-mini futures from mid-August to the present. The lower chart shows the S&P 500 index from November 2007 to the present, including an expanding Diagonal Triangle discussed in the Elliott wave analysis section, below.

[S&P 500 E-mini futures at 3:30 p.m., 230-minute bars, with volume]

What does Elliott wave theory say? The upward correction is wave 2{-7}, a Zigzag pattern with three waves. The third wave, rising wave C{-8}, is now underway. The last wave in a Zigzag has five subwaves, and the present wave is now in its 4th wave, declining wave D{-9}, which will be followed by a final, rising wave E{-9}, which will most likely exceed the correction’s most recent high, 4050.75 attained on November 15.

The end of wave E{9} will also be the end of waves C{-8} and 2{-7}, the correction in its entirety. The decline that follows will be wave 3{-7}, and from it we can expect all of the energy and power that are characteristic of 3rd waves in a trend.

Looking further ahead, wave 3{-7} will be followed by another upward correction, wave 4{-7}, and then by downtrending wave 5{-7}, which will complete the parent wave 3{-6}, which began on August 16. A 5th wave generally moves beyond the end of the preceding 3rd wave in the series, but sometimes comes up short, an action known as a truncation. And sometimes it can extend, creating an unnaturally long 5th wave. So 5th waves can do the unexpected. They are much like the porridge in “Goldilocks and the Three Bears”: Too hot, too cold, or just right.

The parent wave 3{-6} is contained within a series of downtrending 1st waves, each larger than the one it contains. The size stretches up four levels, to downtrending wave 1{-2}, which is contained within downtrending wave 4{-1}, which began on January 4, 2022.

Wave 4{-1} is the next-to-the-last wave within wave 5{-0}, an expanding Diagonal Triangle that began on December 26, 2018 and will be followed by uptrending wave 5{1}, which will most likely carry the price above the January 4 peak — 4818.62 on the index — unless it is truncated. And like all 5th waves it can be extended, rising far more than expected. All of this will almost certainly carry us through 2023 and perhaps further.

The end of wave 5{-0} will kick off a market decline of world-historical importance. For wave 5{-0} is nested within a series of 5th waves, each larger than the wave it contains, stretching up, at the least, to wave 5{+3}, an uptrending wave that began on July 8, 1932, the date the marks the end of the 1929 crash, which triggered the Great Depression.

The end of wave 5{0} will simultaneously trigger the end of all of those larger 5th waves. The downtrend that follows will probably take decades to complete, although it’s possible that the new crash could be far swifter. As in any downtrend, there will be upward corrections that will provide trading opportunities, but the overall direction of the markets will be down.

[S&P 500 index at 9:35 a.m., 3-day bars, with volume]

We Are Here.

These are the waves currently in progress under my principal analysis. Each line on the list shows the wave number, with the subscript in curly brackets, the traditional degree name, the starting date, the starting price of the S&P 500 E-mini futures, and the direction of the wave.

  • S&P 500 Index:
  • 5{+3} Supercycle, 7/8/1932, 4.40 (up)
  • 5{+2} Cycle, 12/9/1974, 60.96 (up)
  • 5{+1} Primary, 3/6/2009, 666.79 (up)
  • 5{0} Intermediate, 12/26/2018, 2346.58 (up)
  • 4{-1} Minor, 1/4/2022 4818.62 (down)
  • 1{-2} Minute, 1/4/2022 4818.62 (down)
  • S&P 500 Futures and index:
  • 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
  • S&P 500 Futures:
  • 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
  • 1{-5} Micro, 1/4/2022, 4808.25 (down)
  • 3{-6} Submicro, 8/16/2022, 4327.50 (down)
  • 2{-7} Minuscule, 10/13/2022, 3502 (up)
  • C{-8} Subminuscule, 11/3/2022, 3704.25 (up)

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, November 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

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures peaked at 3994 before the opening bell, fell to to the 3940s, and then rose slightly. The movements were subwaves of the next-to-the-last wave within the larger final wave of an upward correction that began on October 13.

In Elliott wave terminology: The movements were subwaves of downward wave D{-9} within rising wave C{-8}, the final wave within wave 2{-7}, the upward correction that began on October 13.

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 in overnight trading, returning from the session low, 3912.50, to the 3990s, while remaining below the November 15 high, 4050.75.

What does it mean? Two alternatives of nearly equal likelihood. As principal analysis for the chart, I’ve chosen to treat the rise as an upward correction within the downward wave that began on November 15. That downward wave is the next-to-the-last wave within an upward correction that began on October 13.

What is the alternative? The alternative is to consider Thursday’s session low to be the end of the decline from November 15 and the beginning of the final subwave within the third and probably final wave of the upward correction.

If the price remains below the November 15 high, 4050.75, and reverses to the downside, then the principal scenario gains credence. If the price moves above 4050.75 and keeps rising, then the alternative scenario is more likely.

[S&P 500 E-mini futures at 3:30 p.m., 230-minute bars, with volume]

What does Elliott wave theory say? The upward correction that began on October 13 is wave 2{-7}.

Under the principal scenario, downward wave D{-8} within the correction is underway, havng begun on November 15 from 4050.75. Under the alternative, wave D{-8} ended at Thursday’s session low, 3912.50, and rising wave E{-8} began.

Wave 2{-7} is a subwave of downtrending wave 3{-6}, which began on August 16 from 4327.50 and which is nested within a series of downward waves of increasing size, stretching up wave 4{-1}, which began on January 4 from 4818.62 on the index.

Enclosing them all is wave 5{0}, an expanding Diagonal Triangle that began on December 26, 2018, from 2346.58 on the index. Wave 4{-1} is the next-to-the-last wave within the Triangle. It will be followed by a powerful push to the upside, wave 5{-1}, which will complete the Triangle and mark the start of a major decline.

We Are Here.

These are the waves currently in progress under my principal analysis. Each line on the list shows the wave number, with the subscript in curly brackets, the traditional degree name, the starting date, the starting price of the S&P 500 E-mini futures, and the direction of the wave.

  • S&P 500 Index:
  • 5{+3} Supercycle, 7/8/1932, 4.40 (up)
  • 5{+2} Cycle, 12/9/1974, 60.96 (up)
  • 5{+1} Primary, 3/6/2009, 666.79 (up)
  • 5{0} Intermediate, 12/26/2018, 2346.58 (up)
  • 4{-1} Minor, 1/4/2022 4818.62 (down)
  • 1{-2} Minute, 1/4/2022 4818.62 (down)
  • S&P 500 Futures and index:
  • 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
  • S&P 500 Futures:
  • 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
  • 1{-5} Micro, 1/4/2022, 4808.25 (down)
  • 3{-6} Submicro, 8/16/2022, 4327.50 (down)
  • 2{-7} Minuscule, 10/13/2022, 3502 (up)
  • C{-8} Subminuscule, 11/3/2022, 3704.25 (up)

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, November 18, 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 E-mini futures, 4 minutes before the opening bell, reached a low for the day of 3912.50, thereafter rising during the session into the low 3960s and then resuming the decline.

No change from this morning’s analysis. The rising final wave within an upward correction that began on October 13 is still underway, and internally, it is in a declining next-to-the-last wave. In Elliott wave analytical terminology, declining wave B{-9} within rising wave C{-8} within the upward correction, wave 2{-7} is underway.

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 fall in overnight trading, reaching into the 2910s.

What does it mean? The next-to-the-last wave within the final wave of an upward correction that began on October 13 has begun its decline from Monday’s high, 4050.75.

What are the alternatives? None at present. I’m sure some will develop. They always do.

[S&P 500 E-mini futures at 3:30 p.m., 230-minute bars, with volume]

What does Elliott wave theory say? Declining wave D{-9} within rising wave C{-8}, both within the rising correction, wave 2{-7}, are underway. Wave D{-9} has so far reached returned to the 50% Fibonacci retracement level, 3914.75, falling from just beyond the 61.8% retracement level.

Wave 2{-7} has taken the form of a Zigzag, with five subwaves within the first of the three waves. In a Zigzag (and also a Flat), the third wave in a correction also has five subwaves. Presently, the 4th of those five subwaves is underway, wave D{-9}.

Wave D{-9} will be followed by the final subwave, wave E{-9}, which will mark the completion of wave C{-8} and of the upward correction, wave 2{-7}.

The C wave with within a Zigzag is often about the same length as the A wave. The length of wave A{-8} was 422.25. Wave C{-8} began at 3704.25. So the Wave C{-8} endpoint typically would be around 4126.50, about 127 points above Monday’s high, 4050.75, almost reaching the 78.6% Fibonacci retracement level.

So what comes next? Wave 2{-7} will be followed by wave 3{-7}, a powerful decline that will almost certainly carry the price into the 3400s and perhaps significantly lower, completing the parent wave 3{-6}, which began on August 16 from 4327.50.

As a trader, I’m looking at it this way: I’ve got a bit of a down, a bit of an up, and then a big, big down.

Wave 4{-6}, an upward correction, will follow the energetic 3rd wave decline.

We Are Here.

These are the waves currently in progress under my principal analysis. Each line on the list shows the wave number, with the subscript in curly brackets, the traditional degree name, the starting date, the starting price of the S&P 500 E-mini futures, and the direction of the wave.

  • S&P 500 Index:
  • 5{+3} Supercycle, 7/8/1932, 4.40 (up)
  • 5{+2} Cycle, 12/9/1974, 60.96 (up)
  • 5{+1} Primary, 3/6/2009, 666.79 (up)
  • 5{0} Intermediate, 12/26/2018, 2346.58 (up)
  • 4{-1} Minor, 1/4/2022 4818.62 (down)
  • 1{-2} Minute, 1/4/2022 4818.62 (down)
  • S&P 500 Futures and index:
  • 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
  • S&P 500 Futures:
  • 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
  • 1{-5} Micro, 1/4/2022, 4808.25 (down)
  • 3{-6} Submicro, 8/16/2022, 4327.50 (down)
  • 2{-7} Minuscule, 10/13/2022, 3502 (up)
  • C{-8} Subminuscule, 11/3/2022, 3704.25 (up)

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, November 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 traded narrowly during the session, dropping back into the 3960s on the futures. No change in the analysis. The final wave within an upward correction that began on October 13 continues. That’s wave C{-8} within wave 2{-7}.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to fall in yesterday’s trading, reaching into the 3970s. Yesterday’s high and low — 4050.75 and 3960 — define the range within which the price has remained since then.

What does it mean? The analysis remains unchanged for another day, as it seeks to answer the question, “Where’s does the correction end?” It’s an important question, since the high will most likely mark the end of an upward correction that began on October 13 from 3502. And the answer to the question is, a shrug. Nobody knows.

If the price reaches above yesterday’s high, then the rise that began on November 3 from 3704.25 is still underway, as is the upward correction. I’ve chosen that as principal analysis, but that’s an arbitrary decision, driven by the absence of clear evidence that a strong decline has begun.

What are the alternatives?

If the price turns and falls below the 3960, the lower level of the range, then that increases the likelihood that yesterday’s high marked the end of the rise from November 3, and the end of the upward correction. The price since the high has traced three waves — down, up, down — in a pattern that is consistent with the early steps in a downtrend.

[S&P 500 E-mini futures at 3:30 p.m., 230-minute bars, with volume]

What does Elliott wave theory say? The upward correction that began on October 13 is wave 2{-7}. Internally, it is in its final wave, C{-8}, which began on November 3.

Under the principal analysis, wave C{-8} is in its third subwave, C{-9}. It will be followed by a downward wave D{-9} and then a push to a new high, wave E{-9}, which will complete wave C{-8} and most likely wave 2{-7} as well. It is possible, although not likely, that wave 2{-7} will form a compound correction pattern, stringing together two or three corrective patterns before reaching its end.

Under the alternative analysis, wave C{-8} yesterday completed its 5th internal wave, E{-9}. If wave 2{-7} is forming a simple structure, with a single corrective pattern, then the 2nd wave is over and a strong downtrend, wave 3{-7}, has begun. It will almost certainly carry the price below 3500, perhaps significantly below. If the structure is that of a compound correction, then wave C{-8} will be followed by a declining connector wave, X{-8}, and then a second corrective pattern.

This is all happening within downtrending wave 3{-6}, which began on August 16, from 4127.50. And wave 3{-6} is itself a subwave in a fractal pattern of nested downward waves of increasing size, stretching back to the Great Depression in the 1930s. There will be large ups and downs within the fractal pattern, and as a trader, I plan to keep in mind that the downs will be trends and therefore have more power than will the ups, which will be corrections, running contrary to the trend.

As my mentors in trading often said, “The trend is your friend”, and those will be words to trade by in the coming years.

We Are Here.

These are the waves currently in progress under my principal analysis. Each line on the list shows the wave number, with the subscript in curly brackets, the traditional degree name, the starting date, the starting price of the S&P 500 E-mini futures, and the direction of the wave.

  • S&P 500 Index:
  • 5{+3} Supercycle, 7/8/1932, 4.40 (up)
  • 5{+2} Cycle, 12/9/1974, 60.96 (up)
  • 5{+1} Primary, 3/6/2009, 666.79 (up)
  • 5{0} Intermediate, 12/26/2018, 2346.58 (up)
  • 4{-1} Minor, 1/4/2022 4818.62 (down)
  • 1{-2} Minute, 1/4/2022 4818.62 (down)
  • S&P 500 Futures and index:
  • 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
  • S&P 500 Futures:
  • 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
  • 1{-5} Micro, 1/4/2022, 4808.25 (down)
  • 3{-6} Submicro, 8/16/2022, 4327.50 (down)
  • 2{-7} Minuscule, 10/13/2022, 3502 (up)
  • C{-8} Subminuscule, 11/3/2022, 3704.25 (up)

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, November 6, 2022

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

License
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. During the session the S&P 500 futures declined from the overnight high, 4050.75, to 3960, and then rose slightly. The decline isn’t sufficient to conclude that the rise from November 3 has ended, so this morning’s analysis stands: The upward correction that began on October 13 is still underway. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures reached 4050.75 in overnight trading, a new high in the rise that began on November 3 from 3704.25.

What does it mean? The rise is the final wave within the final wave of that rise that began on October 13 from 3502, an upward correction following the decline that began on August 16 from 4327.50. The correction has completed all of its requirements of form, as laid out in Elliott wave theory, and so any new high could mark the end of the correction and the beginning of a powerful downtrend that will carry the price below 3502, almost without a doubt significantly below that level.

I’ve marked the chart as though the correction were still underway. Such structures tend to end at Fibonacci retracement levels (although not always). The next higher Fib level is the 78.6% retracement, at 4150.84. (The Fibonacci levels are shown on the chart in red.)

What are the alternatives? However, the chances are about equal that the correction ended at the overnight high and that the subsequent small decline is the tentative beginning of what will turn out to be a powerful downtrend.

If the price rises above 4050.75, then the principal scenario matches the chart: The correction continues. The further the price continues to fall, the greater the likelihood that the alternative scenario matches the chart: The correction has ended.

[S&P 500 E-mini futures at 3:30 p.m., 230-minute bars, with volume]

What does Elliott wave theory say? The upward correction is wave 2{-7}, which began on October 13. It is in its third segment, wave C{-8}, which in turn is in its final segment, wave E{-9}.

Under the alternative scenario, waves E{-9}, C{-8} and 2{-7} all ended at the overnight high, 4050.75.

The correction is a subwave of wave 3{-6}, a downtrend that began on August 16.

In either case, wave 2{-7} will be followed by wave 3{-7}, a powerful downtrend that will carry the precise below the start of wave 2{-7} — 3502 — and almost certainly significantly lower, into the 3400s or even the 3300s. Wave 3{-7} will be followed by another upward correction, wave 4{-7}, and then a final decline to new lows that will complete wave 3{-6}.

A larger upward correction, wave 4{-6}, will follow, and will be followed in turn by wave 5{-6}, a downtrend that will complete the parent, downtrending wave 1{-5}, which began on January 4 from 4808.25.

That starting point of wave 1{-5} is also the starting point of a nested series of increasingly larger 1st waves, stretching up to wave 1{-2}. It’s parent, wave 4{-1}, is the downtrending next-to-the-last wave within a large expanding Diagonal Triangle that began on December 26, 2018 from 2346.48 on the index.

There’s a lot of downside in that fractal stew, which will dominant the markets well into next year and possibly into 2024, seasoned by the occasional 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)
  • 3{-6} Submicro, 8/16/2022, 4327.50 (down)
  • 2{-7} Minuscule, 10/13/2022, 3502 (up)
  • C{-8} Subminuscule, 11/3/2022, 3704.25 (up)

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, November 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 moved higher during the session, to 4017.50 on the futures. The move higher confirms this morning’s alternative analysis: Rising wave C{-9} within rising wave C{-8} is underway, within an upward correction, wave 2{-7}.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell off slightly from Friday’s high, 4009.75, and remained within 30 points of that level.

What does it mean? The peak may have been the third of five waves within the rise that began on November 3 from 3704.25, and the pullback, the tentative first steps of the fourth wave. The fifth and final wave will most likely carry the price above Friday’s high and will complete the upward correction that began on October 13 from 3502. An energetic downtrend will follow.

What are the alternatives? The third wave within the rise that began on November 3 may still be underway, and the pullback is a small correction within that rising wave.

[S&P 500 E-mini futures at 3:30 p.m., 230-minute bars, with volume]

What does Elliott wave theory say? The rise that began on November 3 is wave C{-8}, the third wave within an upward correction, wave 2{-7}, that began on October 13.

Under the principal analysis, wave C{-9} — the middle wave within wave C{-8} — ended at Friday’s high, 4009.75, and declining wave D{-9} has begun. Under the alternative analysis, wave C{-9} is still underway.

At this point the two are of equal probability. Friday’s peak was at the 61.8% Fibonacci retracement level, which is often the endpoint of a corrective wave, and so I gave slightly more wait to the scenario that sees wave C{-9} as having ended at that level. If the price continues to fall, then the principal analysis matches the chart. If the price quickly rises back above 4009.75, then the alternative analysis matches the chart.

(The Fibonacci retracement levels are shown on the chart in red.)

In either case, wave C{-9} will be followed by a downward wave D{-9}, and then what will be the final wave of the corrective pattern, rising wave E{-9}, which will complete wave C{-8} and is also likely be the end of wave 2{-7}.

That last sentence has a hedge in it, regarding whether C{-8} will be the final wave within wave 2{-7}. Itr allows for the possibility that the upward correction, wave 2{-7}, will form a compound structure, linking two or three corrective patterns together. Compounding is not often seen in 2nd wave corrections, so I expect wave C{-8} to be the final wave within wave 2{-7}.

Wave 2{-7} will be followed by wave 3{-7}, a powerful downtrend that will carry the price below 3502 — the beginning of wave 2{-7} and perhaps significantly below that level.

Wave 3{-7} is a subwave of wave 1{-6}, a downtrend that began on August 16, and is the smallest of a series of downtrends of increasing size up to wave 4{-1}, which began on January 4 from 4818.62 on the index.

We Are Here.

These are the waves currently in progress under my principal analysis. Each line on the list shows the wave number, with the subscript in curly brackets, the traditional degree name, the starting date, the starting price of the S&P 500 E-mini futures, and the direction of the wave.

  • S&P 500 Index:
  • 5{+3} Supercycle, 7/8/1932, 4.40 (up)
  • 5{+2} Cycle, 12/9/1974, 60.96 (up)
  • 5{+1} Primary, 3/6/2009, 666.79 (up)
  • 5{0} Intermediate, 12/26/2018, 2346.58 (up)
  • 4{-1} Minor, 1/4/2022 4818.62 (down)
  • 1{-2} Minute, 1/4/2022 4818.62 (down)
  • S&P 500 Futures and index:
  • 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
  • S&P 500 Futures:
  • 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
  • 1{-5} Micro, 1/4/2022, 4808.25 (down)
  • 3{-6} Submicro, 8/16/2022, 4327.50 (down)
  • 2{-7} Minuscule, 10/13/2022, 3502 (up)
  • C{-8} Subminuscule, 11/3/2022, 3704.25 (up)

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, November 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

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 E-mini futures broke above 4000 for the first time since mid-September, as the last wave within an upward correction continues. That last wave is in its final subwave. In Elliott wave terminology, wave C{-9} within wave C{-8} within wave 2{-8} is underway. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose sharply overnight, reaching into the 3990s.

What does it mean? The rise that began on October 3 from 3704.25 is the final leg of an upward correction that began on October 13. I’ve reanalyzed the subwaves of the correction, relabeling the decline from October 28 as the second wave in the correction and the present rise as the third wave, raising them by one degree larger than prior analyses had it.

I made that decision based on the power of the present rise, which has carried the price to the area of the 61.8% Fibonacci retracement level. The present rise is in its third wave internally and will have five subwaves when complete. The rise will be followed by a pullback and then an additional upward movement, most likely reaching above the endpoint of the third wave.

The Fibonacci retracement levels are shown on the chart in red.

What are the alternatives? The upward correction is taking the form of a Zigzag. We know this because its first wave had five subwaves. In a Zigzag, the third wave also must have five subwaves. If the present rise ends with only three subwaves, then yesterday’s analysis was correct: The present rise is one degree smaller than today’s analysis would have it.

[S&P 500 E-mini futures at 3:30 p.m., 230-minute bars, with volume]

What does Elliott wave theory say? The upward correction is wave 2{-7}, the second of five waves within downtrending wave 3{-6}, which began on August 16 from 4327.50. Wave 2{-7} is taking the form of a Zigzag, with a rising A wave composed of five subwaves, a declining B wave with three subwaves and a rising C wave with five subwaves.

Internally, wave C{-8} within wave 2{-7} is now underway and is in its rising third wave, C{-9}.

When wave C{-9} is complete, it most likely will also be the end of the upward correction, unless wave 2{-7} forms a compound structure, linking two or three corrective patterns together. A simple structure is more likely for a 2nd wave.

In any event, wave 2{-7} will be followed by a powerful downward movement, wave 3{-7}, which will carry the price below the starting point of the preceding 2nd wave, 3502, and almost certainly significantly below that level.

The Elliott wave analysis suggests that traders would do best to take the happy talk accompanying the present rise with a great deal scepticism.

Today’s new analysis took what had been waves at the {-9} level within wave B{-8}, which began on October 28, and promoted them to the {-8} level. The former analysis had wave B{-8} as still underway, putting it in its rising middle wave, B{-9}, internally.

If wave C{-9} turns out to be the final wave within wave C{-8}, then something else is happening, most likely the scenario outlined in yesterday’s principal analysis. The alternative to today’s principal analysis consider the present rise to be rising wave B{-9} within declining wave B{-8}.

A chart of the former analysis can be found in yesterday’s Trader’s Notebook.

We Are Here.

These are the waves currently in progress under my principal analysis. Each line on the list shows the wave number, with the subscript in curly brackets, the traditional degree name, the starting date, the starting price of the S&P 500 E-mini futures, and the direction of the wave.

  • S&P 500 Index:
  • 5{+3} Supercycle, 7/8/1932, 4.40 (up)
  • 5{+2} Cycle, 12/9/1974, 60.96 (up)
  • 5{+1} Primary, 3/6/2009, 666.79 (up)
  • 5{0} Intermediate, 12/26/2018, 2346.58 (up)
  • 4{-1} Minor, 1/4/2022 4818.62 (down)
  • 1{-2} Minute, 1/4/2022 4818.62 (down)
  • S&P 500 Futures and index:
  • 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
  • S&P 500 Futures:
  • 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
  • 1{-5} Micro, 1/4/2022, 4808.25 (down)
  • 3{-6} Submicro, 8/16/2022, 4327.50 (down)
  • 2{-7} Minuscule, 10/13/2022, 3502 (up)
  • C{-8} Subminuscule, 11/3/2022, 3704.25 (up)

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, November 11, 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 continued to rise during the session, so far reaching 3950 on the futures. In Elliott wave terminology, rising wave B{-9} is underway, a subwave of declining wave B{-8} within an upward correction, wave 2{-7}. I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? After the latest inflation numbers were released, an hour before the opening bell, the S&P 500 E-mini futures shot up by nearly 100 points in a single minute, to 3861, and then continued to rise, coming close to the 50% Fibonacci retracement level in the low 3900s.

What does it mean? The rise suggests that the middle wave within an upward correction that began on October 13 is still in its middle subwave. A final decline will follow, and when it is complete, a larger final wave to the upside will complete the correction.

What is the alternative? This morning’s rapid rise invalidates my late analysis in yesterday’s Trader’s Notebook, which saw decline as ending the middle subwave within the correction’s middle wave. That middle subwave has met all of the requirements for completion, so any higher high in the rise that began this morning could be the end of that subwave. Or not.

[S&P 500 E-mini futures at 3:30 p.m., 230-minute bars, with volume]

What does Elliott wave theory say? The middle subwave is rising wave B{-9}, part of the larger rising middle wave, B{-8}, within wave 2{-7}, the upward correction that began on October. 13. My late analysis yesterday, posted half an hour before the closing bell, saw wave B{-9} as having ended at yesterday’s high, and declining wave C{-9} as having begun. Today’s new high tosses that analysis in the trash. Wave B{-9} is underway, and wave C{-9}, which will complete wave B{-8}, lies in the future.

The flaw in my late analysis yesterday was the lack of a clear three-wave pattern within wave B{-9}. There was a middle subwave of sorts, but it really wasn’t proportional to the parent wave. The overnight decline and subsequent rise provides that clear three-subwave pattern.

Wave 2{-7} is a subwave of downtrendng wave 3{-6}, which began on August 16 and is encompassed by a series of increasingly larger downtrending 1st waves that began on January 4, all part of downward wave 4{-1}, the fourth of five waves within an expanding Diagonal Triangle that began on December 26, 2018.

We Are Here.

These are the waves currently in progress under my principal analysis. Each line on the list shows the wave number, with the subscript in curly brackets, the traditional degree name, the starting date, the starting price of the S&P 500 E-mini futures, and the direction of the wave.

  • S&P 500 Index:
  • 5{+3} Supercycle, 7/8/1932, 4.40 (up)
  • 5{+2} Cycle, 12/9/1974, 60.96 (up)
  • 5{+1} Primary, 3/6/2009, 666.79 (up)
  • 5{0} Intermediate, 12/26/2018, 2346.58 (up)
  • 4{-1} Minor, 1/4/2022 4818.62 (down)
  • 1{-2} Minute, 1/4/2022 4818.62 (down)
  • S&P 500 Futures and index:
  • 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
  • S&P 500 Futures:
  • 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
  • 1{-5} Micro, 1/4/2022, 4808.25 (down)
  • 3{-6} Submicro, 8/16/2022, 4327.50 (down)
  • 2{-7} Minuscule, 10/13/2022, 3502 (up)
  • B{-8} Subminuscule, 10/28/2022, 3924.25 (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, November 10, 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, with the futures reaching into the 3750s. The greater the decline, the greater the likelihood that the final subwave has begun, within the middle wave the upward correction that began on October 13. I’ve marked it that way on the chart: Wave C{-9} within wave B{-8} within the correction, Wave 2{-7}.

If the wave C{-9} decline moves below 3502, the correction’s starting point, then the October 28 peak was the end of the correction, which is the alternative scenario. Under the principal scenario, that peak was the end of the first subwave within the correction.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures traded sideways overnight, slightly above a 38% retracement of the downtrend that lasted from August 16 to October 13, and then declined at the opening bell. The price remained below yesterday’s high, 3847, throughout the night.

What does it mean? The upward correction that began on October 13 continues, It is in the middle of three waves forming a Zigzag corrective structure, and that middle wave is in its middle subwave of three.

What is the alternative? The same as it has been for the past few days: The entire upward correction ended at the October 28 peak, which in the principal analysis is the end of the first subwave within the correction. I find this to be an entirely unlikely scenario, but I can’t rule it out entirely, either.

[S&P 500 E-mini futures at 3:30 p.m., 230-minute bars, with volume]

What does Elliott wave theory say? Unchanged from yesterday.. The S&P 500 is in wave B{-9} within wave B{-8} within wave 2{-7}, where in wave 2{-7} is the upward correction that began on October 13, wave B{-8} is the middle subwave within a three-wave Zigzag corrective pattern, and wave 2{-7} is an upward correction.

The structure is part of wave 3{-6}, a downtrend that began on August 16 from 4327.50 on the futures. When the correction is over, wave 3{-7{ will carry the parent wave significantly lower.

Wave 3{-6} is enclosed by a series of nested 1st waves of increasing size, up to wave 1{-2}, a subwave of wave 4{-1}, the fourth of five waves within an expanding Diagonal Triangle, wave 5{0}, that began on December 26, 2018. When wave 4{-1} is complete, it will be followed by uptrending wave 5{-1}, which will most likely carry the price above the January 4 starting point of wave 4{-1}, 4818.62 on the index.

We Are Here.

These are the waves currently in progress under my principal analysis. Each line on the list shows the wave number, with the subscript in curly brackets, the traditional degree name, the starting date, the starting price of the S&P 500 E-mini futures, and the direction of the wave.

  • S&P 500 Index:
  • 5{+3} Supercycle, 7/8/1932, 4.40 (up)
  • 5{+2} Cycle, 12/9/1974, 60.96 (up)
  • 5{+1} Primary, 3/6/2009, 666.79 (up)
  • 5{0} Intermediate, 12/26/2018, 2346.58 (up)
  • 4{-1} Minor, 1/4/2022 4818.62 (down)
  • 1{-2} Minute, 1/4/2022 4818.62 (down)
  • S&P 500 Futures and index:
  • 1{-3} Minuette, 1/4/2022, 4808.25 (down) (futures), 4818.62 (down) (index)
  • S&P 500 Futures:
  • 1{-4} Subminuette, 1/4/2022, 4808.25 (down)
  • 1{-5} Micro, 1/4/2022, 4808.25 (down)
  • 3{-6} Submicro, 8/16/2022, 4327.50 (down)
  • 2{-7} Minuscule, 10/13/2022, 3502 (up)
  • B{-8} Subminuscule, 10/28/2022, 3924.25 (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, November 9, 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.