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 5330s. The Elliott Wave Theory analysis is unchanged from this morning. The 4th-wave downward correction that began on July 11 continues to work through its endgame. It is in its final subwave, declining wave C, which in turn is in its final subwave, declining wave 5.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell gently overnight an hour before the opening bell, when the Employment Situation Report was published, showing that the unemployment rate had risen from 4.1% to 4.3%. The futures spiked up to 5434.75 and then fell sharply to 5376.50 in the span of six minutes.

The unemployment rate also triggered the Sahm Rule, an unemployment-based metric developed by Federal Reserve economist Claudia Sahm. The rule isn’t a forecast. When triggered, at 0.50 or above, it means that a recession has already begun. The latest reading, based on today’s unemployment release, is 0.53.

Federal Reserve Chair Jerome Powell earlier in the week cautioned that the Sahm rule is a pattern that matches past events, not a causal indicator. “I would call it a statistical thing that has happened through history,” he said.

Sahm, in an essay posted on July 26, wrote: “The Sahm rule is likely overstating the labor market’s weakening due to unusual shifts in labor supply caused by the pandemic and immigration.”

A Sahm-rule breakout has accurately signaled each recession since 1970. Perhaps this triggering will end that winning streak. Or perhaps not…

What does it mean? Elliott Wave Theory analysis sees the decline as a continuation of the final subwave, wave 5, within the final subwave, wave C, of the 4th-wave downward correction that began on July 11.

When that small wave 5 is complete, it will also the end of the larger wave C and of the 4th-wave correction that encompasses both. A 5th-wave uptrend will follow. It is likely to carry the price back into the 5770s and perhaps much higher, although with 5th waves, there is never any guarantee.

Big picture. That rising 5th wave is the key to the S&P 500’s future. When that 5th wave comes to an end, it will also be the end of four 5th waves of increasing size, and of a still larger 3rd, which began on February 21 and which will be followed by a 4th-wave downward correction of proportional size and duration.

[S&P 500 E-mini futures at 3:30.m., 135-minute bars, with volume]

What are the alternatives? On the chart the 3rd wave that preceded the present rather small correction ended on July 11. There’s a case to be made that it actually ended on July 16, and if that’s the case, then the present correction is in its 1st subwave, wave A, with two more subwaves to follow.

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 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 5{-6} is underway and is in its final subwave, uptrending wave 5{-7}, which in turn is in its final subwave, uptrending wave 5{-8}.
• Within wave 5{-8}, wave 4{-9}, a downward correction, is in progress.
• Wave 4{-9} is in its final subwave, wave C{-10}.
• Wave C{-10} is in its final subwave, wave 5{-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, August 2, 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 reached a new high, 5600.75, during the session and then fell sharply, reaching into the 5440s as the closing bell approach.

Elliott Wave Theory analysis: The small decline from the overnight high was the end of the small 4th wave correction within wave C, the final subwave of a 4th wave upward correction that began on July 25. The rise during the session to a new high was wave 5, and its completion also was the end of wave C and of the 4th-wave upward correction.

The rapid decline that followed is a downtrending 5th wave. When it is complete, it will also be the end of its parent wave, the final subwave, wave C, within a 4th-wave downward correction that began on July 11.

On the chart I mark the degree of a wave within the fractal structure of the chart with a subscript in curly brackets, denoting the wave’s distance from Intermediate degree. The present Intermediate wave is wave 5{0}, which began in December 2018.

Using that system, here is what has occurred. Wave C{-12} within wave 4{-11}, a upward correction that began on July 25, ended on August 1 during the session. At that point, downtrending wave 5{-11} began and is underway. When wave 5{-11} is complete, it will also be the end of wave C{-10}, which began on July 16, within a downward correction, wave 4{-9}, which began on July 11. At completion, look for uptrending wave 5{-9} to begin.

Brevity. It’s complicated. The brief version: Down for a few days, then up for maybe several weeks. After that, a big decline that could take months. Unless, some ambiguity in the analysis results in a gotcha and a major revision, which is always a possibility in Elliott Wave Theory analysis.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures peaked overnight in the 5590s and then pulled back.

What does it mean? The Elliott Wave Theory question is whether that peak is the end of wave C, the final subwave within the small 4th-wave upward correction that began on July 25. A study of the smaller waves says that wave C is still in progress.

A close-up view. The C wave will have five subwaves. I count the overnight peak as being the end of the 3rd subwave and the beginning of a smaller 4th-wave downward correction within wave C. That smaller 4th wave will have three subwaves and will be followed by a rising 5th wave that will complete the larger 4th-wave upward correction that began on July 11.

This close-up chart, captured 15 minutes before the opening bell, shows the subwaves.

[S&P 500 E-mini futures at 9:08 a.m., 5-minute bars, with volume]

Big picture. The larger 4th-wave correction will be followed by an uptrending 5th wave which, will complete, will also be the end of a series of 5th waves of increasing size, covering four degrees, and a still larger 3rd wave, that began on February 21. The 3rd wave will be following by a very large 4th-wave downward correction.

[S&P 500 E-mini futures at 3:30 p.m., 125-minute bars, with volume]

What are the alternatives? On the chart the 3rd wave that preceded the present rather small correction ended on July 11. There’s a case to be made that it actually ended on July 16, and if that’s the case, then the present correction is in its 1st subwave, wave A, with two more subwaves to follow.

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 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 5{-6} is underway and is in its final subwave, uptrending wave 5{-7}, which in turn is in its final subwave, uptrending wave 5{-8}.
• Within wave 5{-8}, wave 4{-9}, a downward correction, is in progress.
• Wave 4{-9} is in its final subwave, wave C{-10}.
• From the Morning analysis:
• Wave C{-10} is in its next-to-the-last subwave, wave 4{-11}, which turn is in its final subwave, wave C{-12}.
• Within wave C{-12}, the final subwave, wave 5{-13}, is underway.
• The new afternoon analysis:
• Wave C{-10} is in its final subwave, wave 5{-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, August 1, 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 throughout the session, reaching into the 5580s after the Federal Open Market Committee left the Federal Funds Rate unchanged.

The final subwave of the low-degree upward correction that began on February 25 continues.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight into the 5540s.

What does it mean? Elliott Wave Theory analysis concludes that the 4th-wave upward correction that began on July 25 has progressed to its final subwave, rising wave C. The rise has carried the price beyond the endpoint of the preceding A wave, which lends weight to the conclusion that wave C is underway.

All of this is happening within the 4th-wave upward correction that began on July 25 from 5433, which is a subwave of a larger C wave within a larger 4th-wave downward correction.

On the chart I mark the degree of a wave within the fractal structure of the chart with a subscript in curly brackets, denoting the wave’s distance from Intermediate degree. The present Intermediate wave is wave 5{0}, which began in December 2018.

The present wave is rising C{-12} within rising wave 4{-11} within falling wave C{-10) within falling wave 4{-9}.

Long story short, under the principal analysis, the 4th-wave upward correction that began on July 25 is close to its end.

What’s next? The end of the smaller C wave will also be the end of the small 4th-wave upward correction, as well as of the larger C wave within a 4th-wave downward correction that began on July 11.

That larger wave 4 will be followed by an uptrending 5th-wave, the final subwave within a still larger 5th wave that began on July 2, nested within three additional subwaves, each a larger degree than the one before it. The end of those 5th waves will also be the end of a still larger 3rd wave that encompasses them all, wave 3{-4} on the chart, which began on February 21 from 4959.

That large 3rd wave will be followed by an appropriately large 4th-wave downward correction that will take months to retrace a portion of the 3rd-wave’s rise.

[S&P 500 E-mini futures at 3:30 p.m., 2-hour bars, with volume]

What are the alternatives? On the chart the 3rd wave that preceded the present rather small correction ended on July 11. There’s a case to be made that it actually ended on July 16, and if that’s the case, then the present correction is in its 1st subwave, wave A, with two more subwaves to follow.

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 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.

Wave 5{-6} is underway and is in its final subwave, uptrending wave 5{-7}, which in turn is in its final subwave, uptrending wave 5{-8}.

Within wave 5{-8}, wave 4{-9}, a downward correction, is in progress.

Wave 4{-9} is in its final subwave, wave C{-10}.

Within wave C{-10}, wave 4{-11} is underway and 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, July 31, 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, so far reaching into the 5430s. Elliott Wave Theory: A 4th-wave upward correction, which began on July 25, within a larger 4th-wave downward correction, which began on July 11, is in its final subwave, rising wave C, which in turn is in its middle subwave, declining wave B.

The declining B wave within the smaller 4th wave will be followed by a rising C wave, whose end will also be the end of the 4th-wave upward correction. A downtrending 5th-wave will complete the C wave within the larger 4th-wave downward correction, ending the correction itself.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight into the 5510s and then trended sideways as the opening bell approached.

What does it mean? The S&P 500’s narrow range has continued for nearly a week. Elliott Wave Theory analysis sees the pause as part of a 4th-wave upward correction that began on July 25 within the final subwave, wave C, of the a larger 4th-wave downward correction that began on July 11.

The moody public. Elliott Wave Theory sees market movements as reflecting changes in the public mood, a nebulous concept that covers a broad range of causes and human responses. For the trading segment of the population, an important group when it comes to translating the mood into market price changes, economic reports and Federal Open Market Committee actions can be drivers of the public mood.

And beginning tomorrow, there are major drivers aplenty. All times are New York time.

• On Wednesday at 8:15 a.m., the ADP jobs report, a private-sector report that gives a sneak preview of the government’s Employment Situation Report.
• On Thursday at 2 p.m., the Federal Open Market Committee (FOMC) statement revealing their decision on interest rates: Lower them or do nothing.
• On Friday at 8:30 a.m., the government’s Employment Situation Report, an important input for the FOMC’s decision-making.

Potential impacts. To the extent any of these produce a significant change in the public mood, I would expect to see greater price fluctuation and perhaps greater directionality in the S&P 500.

The question is, which direction? And the short-term answer is, impossible to say. If the 4th-wave upward correction is not yet complete, then the direction will be down. If the 4th-wave is complete, then a 5th-wave uptrend will begin, a small one that will complete the larger corrections C wave.

And of course, the public may shrug, mutter “meh”, and leave the public mood unchanged, and the market’s movements with a lack of clear direction and a narrow range.

[S&P 500 E-mini futures at 3:30 p.m., 2-hour bars, with volume]

What are the alternatives? Unchanged from Monday. On the chart the 3rd wave that preceded the present rather small correction ended on July 11. There’s a case to be made that it actually ended on July 16, and if that’s the case, then the present correction is in its 1st subwave, wave A, with two more subwaves to follow.

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 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 5{-6} is underway and is in its final subwave, uptrending wave 5{-7}, which in turn is in its final subwave, uptrending wave 5{-8}.
• Within wave 5{-8}, wave 4{-9}, a downward correction, is in progress.
• Wave 4{-9} is in its final subwave, wave C{-10}.

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, July 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 a.m. New York time

Half an hour before the closing bell. The S&P 500 futures traded narrowly during the session, remaining below the overnight peak. The 4th-wave downward correction that began on July 11 continues to work through its final subwave, declining wave C, which is in its next-to-the-last subwave, rising wave 4.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose from the 5490s to the 5530s after trading resumed overnight and fell sharply from the high as the opening bell approached.

What does it mean? I did some low-degree Elliott Wave Theory work over the weekend, seeking greater clarity in the decline that began in mid-July.

That decline is a 4th-wave downward correction, which began on July 11 and is in its final subwave, declining wave C, which began on July 16. That much is clear. I found that the internal structure of the earlier parts wave C presented difficulties, and in light of later developments, I’ve revised the internal count.

Wave C when complete will have five subwaves.The 1st subwave, downtrending wave 1, ended on July 19. The 2nd subwave, a wave-2 rising correction, ended on July 23. The 3rd subwave, downtrending wave 3, ended on July 25, and a 4th subwave, a 4th-wave rising correction, is presently underway.

What’s next? The present 4th subwave will be followed by a downtrending 5th wave that will carry the larger C wave to completion. The end of wave C will also be the end of the 4th-wave downward correction that began on July 11.

A 5th-wave upward correction will begin and if typical will carry the price above the end of the preceding uptrendng 3rd wave, 5707.75 and perhaps beyond. Some 5th waves are truncated, failing to exceed the 3rd wave that came before. So there’s no guarantee that the present 5th wave will rise above that 3rd-wave endpoint.

The preceding 3rd wave lasted a bit more than a week to reach completion. A 5th-wave can be of similar duration, but sometimes 5th waves extend, taking more time and covering greater distances, out of proportion with the 3rd wave.

The present 5th wave, when complete, will also trigger the completion of four rising 5th waves of larger size, and also will end the 3rd wave, one degree larger, that began on February 21. A 4th-wave downward correction will begin and will be five degrees higher in the fractal hierarchy than our present 4th wave, a serious downward correction.

[S&P 500 E-mini futures at 3:30 p.m., 200-minute bars, with volume]

What are the alternatives? On the chart the 3rd wave that preceded the present rather small correction ended on July 11. There’s a case to be made that it actually ended on July 16, and if that’s the case, then the present correction is in its 1st subwave, wave A, with two more subwaves to follow.

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 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 5{-6} is underway and is in its final subwave, uptrending wave 5{-7}, which in turn is in its final subwave, uptrending wave 5{-8}.
• Within wave 5{-8}, wave 4{-9}, a downward correction, is in progress.
• Wave 4{-9} is in its final subwave, wave C{-10}.

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, July 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 rose to 5528.25 during the session and then pulled back slightly. The movement was insufficient to bring clarity to the Elliott Wave Theory analysis of the chart.

As the session nears its end, the ambiguity that marked trading overnight remains: Either the 4th-wave downward correction that began on July 11 continues to work through its endgame, or the 5th-wave uptrend that began on July 25th continues to work through its early stages.

On the chart I’ve retained the 4th-wave-continues scenario. The two scenarios, however, are of equal likelihood.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight, reaching into the 5490s.

What does it mean? Elliott Wave Theory, when applied to the chart, sees two potential analyses of equal likelihood.

The first scenario retains yesterday’s analysis: The 4th wave downward correction that began on July 11 continues and is nearing its end.

The second scenario see yesterdays low, 5486, as being the end of the correction, and the subsequent rise as being the being the early stages of a 5th-wave uptrend.

Which is the principal analysis, which the alternative? Absent any certainty, I’m staying with the previous day’s analysis for the chart labelling. If the price continues to rise, reaching above the June 23 high, 5620.75, then the principal analysis switches to the 5th-wave-has-begun scenario. If the price reverses and falls below the June 25 low, 5486, then the principal analysis remains the 4th-wave-continues scenario.

[S&P 500 E-mini futures at 3:30 p.m., 2-hour bars, with volume]

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 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 5{-6} is underway and is in its final subwave, uptrending wave 5{-7}, which in turn is in its final subwave, uptrending wave 5{-8}.

4th-wave continues scenario:

• Within wave 5{-8}, wave 4{-9}, a downward correction, is in progress.
• Wave 4{-9} is in its final subwave, wave C{-10}.

5th-wave-has-begun scenario:

• Within wave 5{-8}, wave 5{-9}, an uptrend, is in progress.
• Wave 5{-9} is in its initial subwave, wave 1{-10}.

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, July 26, 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 during the session into the 5530s and then retreated. This morning’s Elliott Wave Theory analysis stands unchanged: The final subwave within wave C, the final subwave within the 4th-wave downward correction that began on July 11 continues.

Maybe. It’s possible that the session low, 5432.50, marks the end of the the 5th wave, wave C and the 4th-wave correction, and the start of an uptrending 5th wave. There is ambiguity in the wave count within wave 5, especially in the early stages, when the power of the decline was strongest. So for the present, I’m sticking with the 4th-wave scenario. If the wave moves above 5620.25 — the starting point of the 5th wave, then there would be greater confidence that the larger wave 5 uptrend had begun.

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 overnight, reaching into the 5450s and then rising sharply into the 5470s with the release of new GDP statistics as the opening bell approached.

What does it mean? Elliott Wave Theory sees the decline that began on July 23 as the 5th and final subwave within wave C, the 3rd and final subwave within the 4th-wave downward correction that began on July 11.

The question at this point is, How low can it go? And Elliott Wave Theory has no answer, since the price has crashed past the target price range for the wave C. In the words of the New York Yankees baseball legend Yogi Berra, “It ain’t over till it’s over”.

Looking ahead. The end of wave C will also be the end of the 4th-wave downward correction and the beginning of a rising 5th-wave that, if typical, will carry the price above the end of the preceding 3rd wave on July 11, at 5707.75. That’s a tendency not rule. The 5th waves within uptrends tend to vary widely, some ending before the reaching the 3rd-wave peak — truncation — and others moving further beyond that peak than seems proportional — extension.

In either case, the end of this low-degree 5th wave will cascade up the fractal hierarchy of the chart, also marking the end of four 5th waves, each a degree higher than the one below it. At the top of the chain is a 3rd-wave, a degree above the largest of the 5th waves, and it will also come to an end, to be followed by a 4th-wave downward correction that is significantly larger than the one we’re moving through now.

See the “Reading the chart” section below for a brief description of how charts are structure in Elliott Wave Theory.

[S&P 500 E-mini futures at 3:30 p.m., 2-hour bars, with volume]

What are the alternatives? None at present. Ambiguities are certain to emerge, most likely in the subwave analysis within the 5th wave within wave C. Calling the end of a trend is always fraught with peril, because the wave within a price movement sometimes lacks clarity.

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 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 5{-6} is underway and is in its final subwave, uptrending wave 5{-7}, which in turn is in its final subwave, uptrending wave 5{-8}.
• Within wave 5{-8}, wave 4{-9}, a downward correction, is in progress.
• Wave 4{-9} is in its final subwave, wave C{-10}, which in turn is in its final subwave, wave 5{-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, July 25, 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 decline during the session, reaching into the 5470s. The decline helps verify this morning’s Elliott Wave Theory analysis: The 4th-wave downward correction that began on July 11 continues to work through its endgame.

I’ve updated the chart.

9:55 a.m. New York time

What’s happening now? The S&P 500 E-mini futures fell overnight, to 5543.75, and just after the opening bell to 5541.25.

What does it mean? Seen through the lens of Elliott Wave Theory analysis, this decline provided a test of yesterday’s principal analysis, which said: The uptrending 5th wave that began on July 19 continues and is in its 1st subwave. The decline, under this now discredited scenariio, would be a 2nd subwave.

That analysis failed the test.

What kind of test? The test came from a firm rule of Elliott Wave Theory: A 2nd wave never moves beyond the starting point of the preceding 1st wave. If it does, then it’s not a 2nd wave; something else is going on.

The preceding 1st wave began from 5542. The decline has carried the price to within two points above that level.

If the price had remained at or above above 5542, then the principal analysis would have remained viable. Instead, the price dropped below 5542, into the 5530s so far, meaning that something else is going on.

The new principal analysis. That “something else” is this new principal analysis: The 4th-wave downward correction that began on July 11 continues and is in its final subwave, wave C. The C wave when complete will have five subwaves. The rise that began on July 11 was the 2nd subwave within wave C.

[S&P 500 E-mini futures at 3:30 p.m., 2-hour bars, with volume]

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 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 5{-6} is underway and is in its final subwave, uptrending wave 5{-7}, which in turn is in its final subwave, uptrending wave 5{-8}.
• Within wave 5{-8}, wave 4{-9}, a downward correction, is in progress.
• Wave 4{-9} is in its final subwave, wave C{-10}.

Discredited Analysis:

• Within wave 5{-8}, uptrendng wave 5{-9}, is in progress.
• Wave 5{-9} is in its second subwave, wave 2{-10}.

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, July 24, 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 have continued to rise during the session, coming close to 5630 before reversing slightly. Elliott Wave Theory: The 5th-wave uptrend that began on July 19 continues and is in its 1st subwave.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose overnight, approaching 5620 as the opening bell drew near.

What does it mean? The 5th-wave uptrend that began on July 19 continues and is in its initial subwave, according to Elliott Wave Theory. The trend has progressed sufficiently so that I’m comfortable removing the July 22 alternative analysis, which concluded that the previous 4th is underway. It’s not.

The next milestone ahead for wave 5 is to exceed the price where the prior 3rd wave ended, 5707.75. I’ve marked that level on the chart with a dashed line. Typically, a 5th wave will move beyond the 3rd wave’s endpoint, although not always. A rise above that level suggests that this wave 5 isn’t truncated. Whether it will be extended is still an open question.

The financial press will focus on the moment the price moves above 5721.25, the S&P 500 future’s all-time high. In Elliott Wave Theory, that point is the peak of a subwave of the preceding 4th wave, wave B, and so is of little significance to the journey wave 5. It could end up being a pause, the start of a small correction, perhaps a 4th wave following the trend’s 3rd subwave, but perhaps not.

The present 5th wave is rather small in the general scheme of things, two degrees below the Minuscule degree, the smallest degree in Elliott Wave Theory to have a name. Its end of the 5th wave will trigger the completion of a series of larger waves stretching up five degrees, to Subminuette degree within the fractal structure of the chart and the beginning of a large 4th-wave downward correction, also of Subminuette degree. See the “Looking Ahead” section of yesterday’s Trader’s Notebook for a detailed discussion

[S&P 500 E-mini futures at 3:35 p.m., 2-hour bars, with volume]

What are the alternatives? None at present. Ambiguities will surely develop, as they always do.

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 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 5{-6} is underway and is in its final subwave, uptrending wave 5{-7}, which in turn is in its final subwave, uptrending wave 5{-8}.
• Within wave 5{-8}, uptrendng wave 5{-9}, is in progress.
• Wave 5{-9} is in its initial subwave, wave 1{-10}.

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, July 23, 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 during the session into the 5610s. The movement is consistent with this morning’s Elliott Wave Theory principal analysis: The 4th-wave downward correction that began on July 11 ended on July 19 and a the initial subwave of a 5th-wave uptrend has begun.

I’ve updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose after trading resumed overnight, from the 5950s into the 5590s.

What does it mean? Seen through the lens of Elliott Wave Theory, the best analysis of the chart, in my opinion, is that the low of July 19 was the end of the 4th-wave downward correction that began on July 11, and the beginning of an uptrendng 5th wave.

Unsurprisingly, there is an alternative analysis, which sees the July 19 low as a smaller subwave within the C wave, the final subwave of the 4th-wave correction. More on that below.

The 5th wave began from 5542, slightly below the price target range of the preceding 4th wave. The rise that began from that point is taking the form of a trend (rather than a correction). The upper and lower boundaries of the price target range are marked on the chart with red dashed lines.

The wave labels on the chart show the wave number and a subscript showing the wave’s distance from the Intermediate degree within the fractal structure of the chart. The 4th wave that ended on July 19 is wave 4{-9} and the 5th wave that followed is wave 5{-9}.

Looking ahead.The present Intermediate-degree wave is wave 5{0}, which began on December 26, 2018, from the 2340s. So the correction just ended and the 5th wave just begun are small movements within a complex, much larger structure of waves within waves.

The main question for traders is how are far will wave 5{-9} travel. Fifth waves usually move beyond the end of the preceding 3rd wave of the same degree. Wave 3{-9} ended at 5707.75 on July 11. That means that if typical, this 5th wave will rise by at least 179.25 points, or 3.2% from its July 19 starting point.

Sometimes 5th wave fall short of that goal, a condition known as “truncation” among Ellioticians. Usually it move farther, and sometimes much farther in a condition known as extension.

Which variety this 5th wave is, only time will tell.

Big picture. This 5th wave is relatively small, but it will have a large impact. This is a scenario that I’ve described several times, and it bear repeating.

The end of the wave 5{-9} will also be the end of four nested 5th waves of increasing degree, wave 5{-8}, 5{-7}, 5{-6} and 5{-5}. They are all subwaves of wave 3{-4}, one degree higher, which will also end along with those 5th waves.

With 3{-4}, a 4th-wave downward correction, wave 4{-4}, will begin. Wave 3{-4} began on February 21 from 4959, and the 4th-wave correction will be of a similar magnitude. It will, for traders unfamiliar with Elliott Wave Theory, be an OMG! moment.

[S&P 500 E-mini futures at 3:30 p.m., 2-hour bars, with volume]

What are the alternatives? If wave C within the 4th-wave correction is not over, then it is in its 4th of five subwaves, giving the downward correction a bit more time to play through its endgame.

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 3{-2}, 3{-3} and 3{-4} are underway, as is wave 5{-5}.
• Wave 5{-6} is underway and is in its final subwave, uptrending wave 5{-7}, which in turn is in its final subwave, uptrending wave 5{-8}.
• Within wave 5{-8}, uptrendng wave 5{-9}, is in progress.
• Wave 5{-9} is in its initial subwave, wave 1{-10}.

Alternative Analysis:

• Within wave 5{-8}, downward correction wave 4{-9}, is in progress.
• Wave 4{-9} is in its final subwave, wave C{-10}

.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, July 22, 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.