3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures fell during the session to 5412 and then rose, so far reaching into the 5540s. This morning’s analysis is unchanged. The 4th-wave downward correction that began on August 28 continues.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fluctuated sideways overnight an hour before the opening bell, when the release of new inflation data sent the price into a $20 drop within one minute. It then whipsawed to a higher high in pre-opening trading and then declined again.

What does it mean? Despite the drama, Elliott Wave Theory sees the rapid decline as a downwave within the 4th-wave upward correction that began on September 6. It’s a low-degree correction, part of the 5th and final subwave within the final subwave, wave C, of a larger 4th-degree downward correction that began on August 28.

Normally a correction is three subwaves and it’s done. If the correction from August 28 is typical, then the end of the declining 5th wave that will follow the low-degree upward correction will, when complete, also be the end of all waves between the upward correction and the larger 4th-wave downward correction.

Sometimes a wave is atypical. See Alternative #1, below.

There is a limit to the larger 4th-wave downward correction. Under a rule of Elliott Wave Theory, a 4th wave doesn’t move beyond the end of the preceding 1st wave. In the case of the August 28 correction, the preceding 1st wave ended at 5362.75. I’ve marked that level on the chart with a red horizontal line. If the 4th-wave downward correction falls below that level, then the analysis will no longer match the chart and must be revised.

[S&P 500 E-mini futures at 3:30 p.m., 40-minute bars, with volume]

What are the alternatives? There are two.

Alternative #1:

This alternative is a future possibility, after wave C is complete. Typically, a 4th-wave correction will have three subwaves — A, B and C — and then will be complete. Occasionally a subwave will take a compound form, containing two or three corrective patterns, each composed of three subwaves and connected to the prior pattern by a wave called an X wave. This would delay the start of the following 5th wave uptrend.

Alternative #2:

This alternative has to do with how best to interpret the chart’s position within wave C. It plays off of the fact that the 2nd subwave within C under the Principal Analysis is quite small. It is possible that the decline we’ve seen since September 2 is a degree smaller within the fractal structure of the chart than the principal analysis would have. Under this scenario, wave 1 within wave C is underway. This would delay the end of the 4th-wave downward correction and the start of the ensuing 5th wave uptrend.

What does Elliott wave theory say? Here are the waves that underly the analyses.

.Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 5{-2}, 5{-3} and 5{-4} are underway, as is wave 5{-5}.
• Wave 5{-5} is in its initial subwave, wave 1{-6}, which in turn is in its middle subwave, wave 3{-7}.
• Wave 3{-7} is in its next-to-the-last subwave, wave 4{-8}, a downward correction.
• Wave 4{-8} is in its final subwave, wave C{-9}, which is within wave 3{-10}.
• Wave 3{-10} is in its next-to-the-last subwave, wave 4{-11}.

Alternative Analysis #1, compound correction scenario:

• Wave 4{-8} is in its final subwave, wave C{-9}, which is in its middle subwave, wave 3{-10}.
• Wave 5{-10}, still in the future, will be the end of wave C{-9} but not of the wave 4{-8} downward correction, which under this scenario will take a compound form containing two or three corrective patterns.
• The present wave C{-9} will be followed by a rising connector wave X{-9} and then a declining wave A{-9}, the first wave of the second corrective pattern.

Alternative Analysis #2, wave 1 scenario:

• Wave 4{-8} is in its final subwave, wave C{-9}, which is in its initial subwave wave 1{-10}, which in turn is in its final subwave, wave 3{-11}. And wave 3{-11} is in its final subwave, wave 5{-12}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, September 11, 2024

Disclaimer

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

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

License

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

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures zig-zagged during the session, dropping from above 5500 into the 5440s and then rising back.

Elliott Wave Theory: The 4th-wave downtrend that began on August 28th continues to work through its endgame.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight, from the 5460s to 5500.

What does it mean? Elliott Wave Theory sees the continuing rise as part of a 4th-wave upward correction buried three levels deep in the fractal structure of the larger 4th-wave downward correction that began on August 28.

The rising 4th-wave is a subwave of the final subwave, declining wave 5, within the final subwave, declining wave C, within the larger declining 4th-wave correction.

The larger 4th-wave, under a rule of Elliott Wave Theory, must not move below the endpoint of the preceding 1st wave of the same degree. That 1st wave began from 5362.25, a level marked on the chart by a horizontal red line.

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

What are the alternatives? There are two.

Alternative #1:

This alternative is a future possibility, after wave C is complete. Typically, a 4th-wave correction will have three subwaves — A, B and C — and then will be complete. Occasionally a subwave will take a compound form, containing two or three corrective patterns, each composed of three subwaves and connected to the prior pattern by a wave called an X wave. This would delay the start of the following 5th wave uptrend.

Alternative #2:

This alternative has to do with how best to interpret the chart’s position within wave C. It plays off of the fact that the 2nd subwave within C under the Principal Analysis is quite small. It is possible that the decline we’ve seen since September 2 is a degree smaller within the fractal structure of the chart than the principal analysis would have. Under this scenario, wave 1 within wave C is underway. This would delay the end of the 4th-wave downward correction and the start of the ensuing 5th wave uptrend.

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

There are two.

Alternative #1:

This alternative is a future possibility, after wave C is complete. Typically, a 4th-wave correction will have three subwaves — A, B and C — and then will be complete. Occasionally a subwave will take a compound form, containing two or three corrective patterns, each composed of three subwaves and connected to the prior pattern by a wave called an X wave. This would delay the start of the following 5th wave uptrend.

Alternative #2:

This alternative has to do with how best to interpret the chart’s position within wave C. It plays off of the fact that the 2nd subwave within C under the Principal Analysis is quite small. It is possible that the decline we’ve seen since September 2 is a degree smaller within the fractal structure of the chart than the principal analysis would have. Under this scenario, wave 1 within wave C is underway. This would delay the end of the 4th-wave downward correction and the start of the ensuing 5th wave uptrend.

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 5{-2}, 5{-3} and 5{-4} are underway, as is wave 5{-5}.
• Wave 5{-5} is in its initial subwave, wave 1{-6}, which in turn is in its middle subwave, wave 3{-7}.
• Wave 3{-7} is in its next-to-the-last subwave, wave 4{-8}, a downward correction.
• Wave 4{-8} is in its final subwave, wave C{-9}, which is within wave 3{-10}.
• Wave 3{-10} is in its next-to-the-last subwave, wave 4{-11}.

Alternative Analysis #1, compound correction scenario:

• Wave 4{-8} is in its final subwave, wave C{-9}, which is in its middle subwave, wave 3{-10}.
• Wave 5{-10}, still in the future, will be the end of wave C{-9} but not of the wave 4{-8} downward correction, which under this scenario will take a compound form containing two or three corrective patterns.
• The present wave C{-9} will be followed by a rising connector wave X{-9} and then a declining wave A{-9}, the first wave of the second corrective pattern.

Alternative Analysis #2, wave 1 scenario:

• Wave 4{-8} is in its final subwave, wave C{-9}, which is in its initial subwave wave 1{-10}, which in turn is in its final subwave, wave 3{-11}. And wave 3{-11} is in its final subwave, wave 5{-12}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, September 10, 2024

Disclaimer

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

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

License

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

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures continued to work their way higher during the session, reaching into the 5490s.

Elliott Wave Theory: The continuation of the rise increases the likelihood this this morning’s analysis, that the next-to-the-last subwave, rising wave 4, within the final subwave, falling wave 5, within the final subwave, falling wave C, of the 4th wave downward correction that began on August 28.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to rise after trading resumed overnight, from Friday’s low, 5394, into the 5440s

What does it mean? The Elliott Wave Theory question posed by this chart is this: “How close is the 4th-wave downward correction to its end?”. The correction, which began on August 28, is if typical in its final subwave, wave C. The C wave is in the middle subwave within its final subwave — wave 3 within wave 5.

The waves on the chart are labeled with a wave number followed by a subscript, in curly brackets, showing the wave’s position relative to Intermediate degree within the fractal structure of the chart. The present Intermediate degree is wave 5{0}, which began in December 2018.

The futures at present are in wave 5{-10} within wave C{-9} within wave 4{-8}. At question is where wave 5{-10} in its journey.

A firm rule of Elliott Wave Theory declares that no 4th wave can move below the endpoint of the preceding 1st wave. If it does, then the chart labeling must be changed to conform to the rule.

The previous 1st wave, wave 1{-8}, ended on August 7 at 5362.75. I’ve marked that level on the chart with a red line. Friday’s low, 5394, is quite close to that level. If the labeling is correct, then wave 4{-8} is almost complete.

Within wave 5{-10}, the decline is wave 3{-11}. The most likely count, it seems to me, is to label Friday’s low as the end of wave 3{-11} and the subsequent rise, still underway, was rising wave 4{-11}. When wave 4{-11} is complete, then declining wave 5{-11} will complete waves 5{-10} and C{-9}, and the downward correction, wave 4{-8}.

An uptrending 5th wave, wave 5{-8}, will follow, if this 4th-wave correction is typical, with three subwaves. There are some less common alternatives that could extend the correction. See Alternative #1 below.

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

What are the alternatives? There are two.

Alternative #1:

This alternative is a future possibility, after wave C is complete. Typically, a 4th-wave correction will have three subwaves — A, B and C — and then will be complete. Occasionally a subwave will take a compound form, containing two or three corrective patterns, each composed of three subwaves and connected to the prior pattern by a wave called an X wave. This would delay the start of the following 5th wave uptrend.

Alternative #2:

This alternative has to do with how best to interpret the chart’s position within wave C. It plays off of the fact that the 2nd subwave within C under the Principal Analysis is quite small. It is possible that the decline we’ve seen since September 2 is a degree smaller within the fractal structure of the chart than the principal analysis would have. Under this scenario, wave 1 within wave C is underway. This would delay the end of the 4th-wave downward correction and the start of the ensuing 5th wave uptrend.

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 5{-2}, 5{-3} and 5{-4} are underway, as is wave 5{-5}.
• Wave 5{-5} is in its initial subwave, wave 1{-6}, which in turn is in its middle subwave, wave 3{-7}.
• Wave 3{-7} is in its next-to-the-last subwave, wave 4{-8}, a downward correction.
• Wave 4{-8} is in its final subwave, wave C{-9}, which is within wave 3{-10}.
• Wave 3{-10} is in its next-to-the-last subwave, wave 4{-11}.

Alternative Analysis #1, compound correction scenario:

• Wave 4{-8} is in its final subwave, wave C{-9}, which is in its middle subwave, wave 3{-10}.
• Wave 5{-10}, still in the future, will be the end of wave C{-9} but not of the wave 4{-8} downward correction, which under this scenario will take a compound form containing two or three corrective patterns.
• The present wave C{-9} will be followed by a rising connector wave X{-9} and then a declining wave A{-9}, the first wave of the second corrective pattern.

Alternative Analysis #2, wave 1 scenario:

• Wave 4{-8} is in its final subwave, wave C{-9}, which is in its initial subwave wave 1{-10}, which in turn is in its final subwave, wave 3{-11}. And wave 3{-11} is in its final subwave, wave 5{-12}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, September 9, 2024

Disclaimer

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

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

License

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

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures fell during the session, reaching into the 5410s.

Elliott Wave Theory: I’ve updated the chart below to show a close-up the 4th-degree downward correction that began on August 28. The closer view clarifies that the final subwave of the correction, wave C, is in its downtrending 3rd-wave, which in turn is in its final subwave. I had previously counted wave C as being in its final subwave, wave 5.

Waves on the chart are marked with a wave number followed by a subscript in curly brackets showing the wave’s distance within the fractal structure of the chart from Intermediate degree. The present Intermediate degree is wave 5{0}, which began in December 2018. The 4th wave downward correction is wave 4{-8}, meaning it is eight degrees below Intermediate degree. Internally, wave 4{-8} is in wave C{-9}, which in turn is in wave 3{-10}. That 3rd wave is in wave 5{-11}, its final subwave.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell to 5466.50 overnight until an hour before the opening bell, when the Employment Situation Report was published and the price rose into the 5510s within the span of a minute, and kept rising, remaining below the prior day’s high.

The report showed that the unemployment rate had decline from 4.3 to 4.2, and as a result the Sahm Rule, the most sensitive measure of whether a recession is underway, showed that yes, the U.S. is still in a recession, for the second month in a row,

What does it mean? I’ll leave it to economists to parse the importance of the recession indicator. The S&P 500 futures, Elliott Wave Theory shows, is still in the 4th-wave downward correction that began on August 28. That correction is in wave C, it’s final subwave if wave 4 is typical. (See the alternatives section below for a discussion of the atypical.)

The overnight decline suggests to me that the final subwave, wave 5, within wave C has begun, although the chart, as is often the case for low-degree movements, is not entirely clear, and it’s possible that the next-to-the-last subwave is still underway.

When the 4th-wave correction that began in late August is complete, it will be followed by an uptrending 5th wave that will likely carry the price back into the 5660s and perhaps signficantly higher.

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

What are the alternatives? There are two, the same as yesterday. The description of each alternative is unchanged from the day before.

Alternative #1:

This alternative is a future possibility, after wave C is complete. Typically, a 4th-wave correction will have three subwaves — A, B and C — and then will be complete. Occasionally a subwave will take a compound form, containing two or three corrective patterns, each composed of three subwaves and connected to the prior pattern by a wave called an X wave. This would delay the start of the following 5th wave uptrend.

Alternative #2:

This alternative has to do with how best to interpret the chart’s position within wave C. It plays off of the fact that the 2nd subwave within C under the Principal Analysis is quite small. It is possible that the decline we’ve seen since September 2 is a degree smaller within the fractal structure of the chart than the principal analysis would have. Under this scenario, wave 1 within wave C is underway. This would delay the end of the 4th-wave downward correction and the start of the ensuing 5th wave uptrend.

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 5{-2}, 5{-3} and 5{-4} are underway, as is wave 5{-5}.
• Wave 5{-5} is in its initial subwave, wave 1{-6}, which in turn is in its middle subwave, wave 3{-7}.
• Wave 3{-7} is in its next-to-the-last subwave, wave 4{-8}, a downward correction.
• Wave 4{-8} is in its final subwave, wave C{-9}, which is within wave 3{-10}.
• Wave 3{-10} is in its final subwave, wave 4{-11}.

Alternative Analysis #1, compound correction scenario:

• Wave 4{-8} is in its final subwave, wave C{-9}, which is in its middle subwave, wave 3{-10}.
• Wave 5{-10}, still in the future, will be the end of wave C{-9} but not of the wave 4{-8} downward correction, which under this scenario will take a compound form containing two or three corrective patterns.
• The present wave C{-9} will be followed by a rising connector wave X{-9} and then a declining wave A{-9}, the first wave of the second corrective pattern.

Alternative Analysis #2, wave 1 scenario:

• Wave 4{-8} is in its final subwave, wave C{-9}, which is in its initial subwave wave 1{-10}, which in turn is in its final subwave, wave 3{-11}. And wave 3{-11} is in its final subwave, wave 5{-12}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, September 6, 2024

Disclaimer

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

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

License

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

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures swung slightly higher into the 5550s and then slightly lower into 5490s during the session, retracing some of the decline as the closing bell approached.

This morning’s principal analysis remains unchanged. The 4th wave downward correction that began on August 28 remains unchanged and has been in its final subwave, wave C, since September 2. Wave Cis in its next-to-the-last subwave, a smaller 4th-wave upward correction, which began on September 3.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fluctuated between the 5540s and the 5510s overnight.

What does it mean? Elliott Wave Theory sees the pause that began on September 3 as the next-to-the-last subwave — wave 4 — within the final subwave — wave C — within the larger 4th-wave downward correction that began on August 28.

If the larger 4th-wave correction is typical, the the correction is working through its endgame and will soon be over. It will be followed by a 5th-wave uptrend that is likely to carry the price back into the 5660s at a minimum, and perhaps much higher.

Since there is no guarantee that the larger 4th wave will be typical, there are alternatives. None of the alternatives question the basic pattern that lies ahead –end of the downward correction and beginning of an uptrend — but only the timing of the decline’s end and the beginning of the following rise.

[S&P 500 E-mini futures at 3:30 p.m., 90-minute bars, with volume]

What are the alternatives? There are two.

Alternative #1:

This alternative is a future possibility, after wave C is complete. Typically, a 4th-wave correction will have three subwaves — A, B and C — and then will be complete. Occasionally a subwave will take a compound form, containing two or three corrective patterns, each composed of three subwaves and connected to the prior pattern by a wave called an X wave. This would delay the start of the following 5th wave uptrend.

Alternative #2:

This alternative has to do with how best to interpret the chart’s position within wave C. It plays off of the fact that the 2nd subwave within C under the Principal Analysis is quite small. It is possible that the decline we’ve seen since September 2 is a degree smaller within the fractal structure of the chart than the principal analysis would have. Under this scenario, wave 1 within wave C is underway. This would delay the end of the 4th-wave downward correction and the start of the ensuing 5th wave uptrend.

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 5{-2}, 5{-3} and 5{-4} are underway, as is wave 5{-5}.
• Wave 5{-5} is in its initial subwave, wave 1{-6}, which in turn is in its middle subwave, wave 3{-7}.
• Wave 3{-7} is in its next-to-the-last subwave, wave 4{-8}, a downward correction.
• Wave 4{-8} is in its final subwave, wave C{-9}, which is within wave 4{-10}.
• Wave 5{-8} will follow the end of the present wave C{-9}.

Alternative Analysis #1, compound correction scenario:

• Wave 4{-8} is in its final subwave, wave C{-9}, which is in its next-to-the-last subwave, wave 4{-10}.
• Wave 5{-10 will be the end of wave C{-9} but not of the wave 4{-8} downward correction, which under this senario will take a compound form containing two or three corrective patterns.
• The present wave C{-9} will be followed by a rising connector wave X{-9} and then a declining wave A{-9}, the first wave of the second corrective pattern.

Alternative Analysis #1, wave 1 scenario:

• Wave 4{-8} is in its final subwave, wave C{-9}, which is in its initial subwave wave 1{-10}, which in turn is in its next-to-the-last subwave, wave 4{-11}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, September 5, 2024

Disclaimer

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

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

License

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

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures rose into the 5560s during the session and then fell back, so far reaching into the 5510s.

Elliott Wave Theory: The last leg — wave C — within the 4th-wave downward correction that began on August 28 continues, working its way through the 4th of five subwaves.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell slightly overnight, coming close to 5500, and then rose slightly.

What does it mean? The pattern, analyzed using Elliott Wave Theory, appears to be an upward 4th wave correction within wave C, the final subwave of the larger 4th-wave downward correction that began on August 28.

The correction within wave C will be followed by a downtrending 5th-wave that will finish wave C and most likely will also be the end of the parent wave, the larger 4th-wave downward correction.

An uptrending 5th wave will follow, the final subwave within an uptrending 3rd wave that began on August 7.

[S&P 500 E-mini futures at 3:30 p.m., 90-minute bars, with volume]

What are the alternatives? An alternative remains as a future possibility, after wave C is complete. Typically, a 4th-wave correction will have three subwaves — A, B and C — and then will be complete. Occasionally a subwave will take a compound form, containing two or three corrective patterns, each composed of three subwaves and connected to the prior pattern by a wave called an X wave.

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 5{-2}, 5{-3} and 5{-4} are underway, as is wave 5{-5}.
• Wave 5{-5} is in its initial subwave, wave 1{-6}, which in turn is in its middle subwave, wave 3{-7}.
• Wave 3{-7} is in its next-to-the-last subwave, wave 4{-8}, a downward correction.
• Wave 4{-8} is in its final subwave, wave C{-9}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, September 4, 2024

Disclaimer

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

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

License

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

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures fell sharply during the session, from the 5660s, so far reaching the 5540s. Elliott Wave Theory: The decline confirms this mornings principal analysis: The 4th-wave downward correction that began on August 28 has entered its end game. It is in its final subwave, wave C.

Wave C will have five subwaves and may be in its 3rd subwave, although the power of the fall makes the pattern somewhat unclear.

When wave C is complete, the parent wave 4 will also be complete, and a 5th-wave uptrend will begin.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures began at a high, 5669.75, when trading resumed overnight and then fell into the 5620s.

What does it mean? The higher high brought clarity to the Elliott Wave Theory analysis of the internal structure of the 4th-wave downward correction that began on August 22.

Under the new analysis, the August 28 low that had been labeled as the end of the B wave within the correction is now labeled the end of wave A, the higher high is the end of wave B, and the decline now underway is the final subwave, wave C, if the correction is typical.

[S&P 500 E-mini futures at 3:30 p.m., 90-minute bars, with volume]

What are the alternatives?

Alternative Analysis #1:

If the price reverses and reaches a still higher high, then wave B is still underway and wave C has not yet begun.

Alternative Analysis #2:

The alternative lies in the future, after wave C is complete. Typically, a 4th-wave correction will have three subwaves — A, B and C — and then will be complete. Occasionally a subwave will take a compound form, containing two or three corrective patterns, each composed of three subwaves and connected to the prior pattern by a wave called an X wave.

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 5{-2}, 5{-3} and 5{-4} are underway, as is wave 5{-5}.
• Wave 5{-5} is in its initial subwave, wave 1{-6}, which in turn is in its middle subwave, wave 3{-7}.
• Wave 3{-7} is in its next-to-the-last subwave, wave 4{-8}, a downward correction.
• Wave 4{-8} is in its final subwave, wave C{-9}.

Alternative Analysis #1:

• Wave 4{-8} is in its middle subwave, wave B{-9}.

Alternative Analysis #2:

• Wave C{-9} is part of a the first corrective pattern within a compound correction and will be followed by wave X{-9}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

Learning and other resources. Elliott wave analysis provides context, not prophecy. As the 20th century semanticist Alfred Korzybski put it in his book Science and Sanity (1933), “The map is not the territory … The only usefulness of a map depends on similarity of structure between the empirical world and the map.” And I would add, in the ever-changing markets, we can judge that similarity of structure only after the fact.

See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, September 3, 2024

Disclaimer

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

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

License

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

Based on a work at www.timbovee.com.

Market holiday. U.S. markets will be closed on Monday for the Labor Day holiday, the traditional end of the summer vacation season. The S&P 500 futures will resume trading overnight and Tuesday’s markets will follow their normal schedules.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures traded net-sideways during the session, remaining between the 5640s and the 5590s. Elliott Wave Theory: The 4th-wave downward correction continues to work through what is most likely its endgame, assuming a typical pattern rather than one of the less common varieties.

Several economic eports that sometimes move markets will be released after trading resumes next week: Job openings, Factory Orders and the Federal Reserve’s Beige Book on Wednesday. On Thursday, the ADP sneak peak at the government’s jobs report. And the big one on Friday, the Employment Situation report, with the government’s employment and unemployment figures, key to the Federal Open Market Committee’s rate-setting next month, and also the Sahm Rule, an early-warning system that signaled the start of recession last month, prompting much skepticism among economists.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight, from slightly below 5610 into the 5630s.

What does it mean? Elliott Wave Theory sees the rise as a counter-trend move within the final subwave — falling wave 5 — within the larger final subwave — falling wave C — within the low-degree 4th wave downward corrective pattern that began on August 22.

When wave 5 is complete, it will also be the end of the larger wave C and, if the correction is typical, the still larger wave 4. See the “What happens next?” section  Tuesday, August 27 Trader’s Notebook for a description of ways the correction could extend in a compound form containing multiple corrective patterns.

The 4th-wave downward correction will be followed by a 5th-wave uptrend that will, if typical, carry the price into the 5670s and beyond.

[S&P 500 E-mini futures at 3:30 p.m., 80-minute bars, with volume]

What are the alternatives? None at present. Without a doubt, new alternatives will develop.

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 5{-2}, 5{-3} and 5{-4} are underway, as is wave 5{-5}.
• Wave 5{-5} is in its initial subwave, wave 1{-6}, which in turn is in its middle subwave, wave 3{-7}.
• Wave 3{-7} is in its next-to-the-last subwave, wave 4{-8}, a downward correction.
• Wave 4{-8} is in its final subwave, wave C{-9}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

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, August 30, 2024

Disclaimer

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

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

License

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

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closng bell. The S&P 500 futures rose to 5663.75 during the session, and then fell sharply back into the 5990s.

Applying Elliott Wave Theory, the pattern matches the principal analysis laid out this morning: The prior rise was the 4th subwave within wave C, which in turn is the final subwave of the 4th-wave downward correction that began on August 22.

The session high fell short by a few points of the start of wave C, from 5669. Under the principal analysis, the subsequent decline is the 5th and final subwave within wave C.

What happens next? 

This section is lifted verbatim from Tuesday, August 27 Trader’s Notebook.

There are two possibilities after wave C is complete, and possibilities within each possibility.

The 5th-wave uptrend will follow the end of the compound 4th-wave correction.

Most of the time, wave C is the end of the correction. In this case, the correction — wave 4 — will be followed by an uptrending 5th waves that, if typical, will move into the 5660s, beyond the beginning of wave 4, and possibly higher.

Some 5th waves are truncated and fail to reach the starting point of the preceding 4th wave.

Some 5th waves are extended and move much further beyond the beginning of the 4th wave, traveling a greater distance than proportionality suggested by the context of the wave.

Some corrective waves, especially 4th waves, form a compound structure, containing two or three A-B-C wave patterns. If that were to occur, then the present declining C wave within wave 4 would be followed by a rising X wave and then by another declining A wave, which will be followed by waves B and C. If the compound structure takes a triple form, there will be a second X wave, followed by a third A-B-C pattern.

And there’s an alternative. It’s possible to fit the session’s rise and decline pattern into this morning’s alternative analysis, which sees yesterday’s low, 5661.25, as being the end of wave C. If that’s the case, then wave 5, one degree larger, has begun. The rise that ended during the session is the 1st subwave within wave 5, and the decline now underway is the 2nd subwave.

This scenario will be disproven if the present decline falls below 5561.25, the start of the initial subwave — wave 1 — since it is a firm rule of Elliott Wave Theory that wave 2 never moves beyond the start of wave 1.

Charts. I’ve udpated the the lower, broader-view chart. The upper, close-up chart is unchanged.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight, so far reaching into the 5630s as it retraces a portion of yesterday’s session decline.

What does it mean? Elliott Wave Theory sees the decline as the end of the middle subwave — wave 3 — within wave C, which is in turn the final subwave of the low-degree 4th-wave downward correction that began on August 22.

Close-up view. Here’s a close-up view of the downward correction, taken 35 minutes before the opening bell, showing the subwave count to wave C. In three-wave corrections — the pattern most often seen — the C-wave has five subwaves.

The next-to-the-last subwave within wave C — rising wave 4 — is now underway.

[S&P 500 E-mini futures at 8:55 a.m., 15-minute bars, with volume]

A broader view. The 4th-wave correction is the next-to-the-last subwave within a 3rd-wave uptrend that began on August 7. Encompassing that uptrend is a larger uptrend, the 1st wave within a larger 5th-wave uptrend that began on August 5.

[S&P 500 E-mini futures at 3:30 p.m., 80-minute bars, with volume]

What are the alternatives? If I squint my eyes at the chart, I can see yesterday’s session low, 5561.25, as being the end of the 5th and final wave within wave C. Should the price rise above the 5669, the end of the middle subwave, wave B, within the 4th-wave downward correction, then this scenario becomes more likely.

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 5{-2}, 5{-3} and 5{-4} are underway, as is wave 5{-5}.
• Wave 5{-5} is in its initial subwave, wave 1{-6}, which in turn is in its middle subwave, wave 3{-7}.
• Wave 3{-7} is in its next-to-the-last subwave, wave 4{-8}, a downward correction.
• Wave 4{-8} is in its final subwave, wave C{-9}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

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, August 29, 2024

Disclaimer

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

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

License

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

Based on a work at www.timbovee.com.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures fell into the 5370s during the session and then rose sharply, back into the 5610s so far.

Elliott Wave Theory: The movement is taking place within a C wave, the final subwave within the late-August 4th-wave downward correction. C waves have five subwaves, and although the details are a bit ambiguous, it looks to me as though the decline is the 3rd subwave within wave C.

A very low degree rising 4th subwave will follow, and then a decline, the 5th and final subwave within wave C.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose from the 5630s to the 5650s overnight, pulling back slightly as the opening bell approached.

What does it mean? The overnight fluctuations, in terms of Elliott Wave Theory, were part of the final subwave — wave C — within the 4th-wave downward correction that began on August 22. In yesterday’s Trader’s Notebook, I ran through the possible permutations wave C and its parent, wave 4, might take, and what comes after wave 4 reaches its end, and I refer the reader to that discussion. So far today, nothing in the analysis has changed.

[S&P 500 E-mini futures at 3:30 p.m., 80-minute bars, with volume]

What are the alternatives? None at present, beyond those in yesterday’s discussion of the possibilities. Without a doubt, new ambiguities will develop

What does Elliott wave theory say? Here are the waves that underly the analyses.

Principal Analysis:

• Rising wave 5{0} is underway. It is a wave of Intermediate degree that began in December 2018.
• It is in its final subwave, wave 5{-1}.
• Within wave 5{-1}, rising waves 5{-2}, 5{-3} and 5{-4} are underway, as is wave 5{-5}.
• Wave 5{-5} is in its initial subwave, wave 1{-6}, which in turn is in its middle subwave, wave 3{-7}.
• Wave 3{-7} is in its next-to-the-last subwave, wave 4{-8}, a downward correction.
• Wave 4{-8} is in its final subwave, wave C{-9}.

Reading the chart. Price movements — waves – – in Elliott wave analysis are labeled with numbers within trending waves and letters with corrective waves. The subscripts — numbers in curly brackets — designate the wave’s degree, which, in Elliott wave analysis, means the relative position of a wave within the larger and smaller structures that make up the chart. R.N. Elliott, who in the 1930s developed the form of analysis that bears his name, viewed the chart as a complex structure of smaller waves nested within larger waves, which in turn are nested within still larger waves. In mathematics it’s called a fractal structure, where at every scale the pattern is similar to the others.

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, August 28, 2024

Disclaimer

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

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

License

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

Based on a work at www.timbovee.com.