3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures hit a low of 4746.50 early in the session, and then rose slightly, into the 4770s. The reversal price was within the typical range of a 4th wave correction. If the price remains above the lower boundary of the range, 4743.25, then I’ll retain my present analysis: A 4th wave of low degree is underway as its much larger parent, a wave 2 upward correction, continues to work through its end game.

I’ve updated the chart.

2:50 p.m. New York time

Trades. I exited my short Iron Fly options position, the day after entry, on XSP for a 3.6% loss. It was a significant down day on the S&P 500, and XSP, which tracks the index, moved far enough so as to be unprofitable. I’ve updated the trade analysis with results.

No other trades today. I passed on entering another 1DTE trade because the ADP sneak preview to the employment numbers will be released before the opening bell. It often causes unanticipated moves in the price.

I also analyzed three possible earnings plays, on CAG, LW and WBA, and passed on all three. None produced sufficient return for a position that covered the expected moves sufficiently.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to decline overnight, reaching deep into the 4760s.

What does it mean? The greater the decline, the more likely the first alternative analysis becomes: The 2nd-wave upward correction ended on January 2, and a 3rd-wave downtrend has begun.

I’ve chose to retain yesterday’s principal analysis for the moment: A low degree wave 3 within the final subwave of the correction, rising wave C, ended on January 2. A low-degree 4th wave within with the much larger correction is underway and will be followed by a rising 5th wave that will end the correction.

The low-degree 4th wave remains within its typical range: The 4th subwave within the preceding 3rd wave of the same degree. That range stretches from 4830.75 to 4743.25.

If the price moves below that lower number, I will switch the chart to Alternative #1: The correction ended on January 2 and wave 3 began, retaining this morning’s principal analysis as a new 1st alternative.

What are the alternatives? There are two, the same as yesterday.

Alternative #1: It’s possible that the January 2 peak was the end of wave 5{-8}. If that proves to be the case, then the large 2nd wave — wave 2{-2} on the chart — ended at that peak, and wave 3{-2} has begun its energetic decline that will carry the price below the start of the preceding 1st wave — 3491.58 — and perhaps significantly below.

Alternative #2: It’s also possible that wave 2{-2} will take a compound form, containing two or three corrective patterns. if that proves to be the case, then the present declining is an X wave, separating the first corrective pattern, which ended overnight, from the second corrective pattern.

[S&P 500 E-mini futures at 9:35 a.m., 2-hour bars, with volume]

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

Principal Analysis:

• A downtrend, wave 4{-1}, began on January 4, 2022 and is underway.
• Within wave 4{-1}, an upward correction, wave 2{-2}, began on October 13, 2022.
• The third wave of the correction, wave C{-3}, is underway.
• Wave C{-3} has reached its 5th and final subwave, wave 5{-4} and a series of smaller 5th waves, down to wave 5{-7}.
• Within wave 5{-7}, the next-to-the-last subwave is underway, wave 4{-8}, a decline that began on January 2, 2024.

Alternative #1:

• Wave 5{-8}, the final wave of the upward correction, ended on January 2, also ending wave C{-3} and the upward correction, wave 2{-2}.
• Wave 3{-2} is underay.

Alternative #2:

• Wave 2{-2} is taking a compound form.
• The first corrective pattern ended on January 2, the end of wave C{-3}.
• A declining connector wave is underway, wave X{-3}.

We Are Here.

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

• S&P 500 Index:
• 5{+3} Supercycle, 7/8/1932, 4.40 (up)
• 5{+2} Cycle, 12/9/1974, 60.96 (up)
• 5{+1} Primary, 3/6/2009, 666.79 (up)
• 5{0} Intermediate, 12/26/2018, 2346.58 (up)
• S&P 500 Futures and index:
• 4{-1} Minor, 1/4/2022, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 2{-2} Minute, 10/13/2022, 3491.58 (up)
• C{-3} Minuette, 10/27/2023, 4122.25 (up)

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, January 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.

Symbols traded today: XSP (1DTE)

I entered a short Iron Fly position on XSP that expires the next day, a 1DTE position, and exited it for a 3.6% loss.

XSP short Iron Fly

LOT:	1	ENTRY DATE:	1/2/2024
		EXIT DATE:	1/3/2024
		DAYS HELD:	1

Entry and Exit

METRIC	CREDIT	DEBIT	CHANGE	CHANGE %	ANNUALIZED CHANGE %
Options premium	$ 2.16	$ 2.24	$ (0.08)	-3.6%	-1296%
METRIC	ENTRY	EXIT	CHANGE	CHANGE %	ANNUALIZED CHANGE %
Stock price	$ 474.54	$ 472.17	$ 2.37	-0.50%	-182%
Impllied Volatility Rate	10.5	14.0	3.5
Days to expiration	1	0

The structure of the position

STRUCTURE	STRIKE	ODDS EXPIRE OTM	DELTA	IN PRICE	OUT PRICE	CHANGE
Calls
Long	478.00	90%	12	$ (0.18)	$ 0.02	$ (0.16)
Break-even	476.16	67%	34	$ 1.00
Short	474.00	44%	56	$ 1.54	$ (0.35)	$ 1.19
Puts
Short	474.00	56%	44	$ 0.92	$ (2.23)	$ (1.31)
Break-even	472.16	74%	26.5
Long	470.00	91%	9	$ (0.12)	$ 0.32	$ 0.20
						======
					NET TOTAL:	$ (0.08)

Risk and Reward

Per contract:
Reward	216.00
Risk	184.00
R/R Ratio (n:1)	0.9

By Tim Bovee, Portland, Oregon, January 2-3, 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.

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 futures worked their way lower during the session, reaching the 4760s as the closing bell approached. This morning’s analysis stands unchanged. The 2nd wave upward correction continues to play its end game within its final subwave, wave C. I’ve updated the chart.

2:30 p.m. New York time

Trade. I’ve entered a short Iron Fly options position on XSP. The options expire the day after entry, and I intend to exit the position shortly after the opening bell tomorrow. I’ve posted an analysis of the trade.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures traded sideways until shortly before the London and EU exchanges, and then began to fall, from 4828, by more than 50 points as the opening bell in New York approached.

What does it mean? The 2nd-wave upward correction that began on October 13, 2022 is continuing. Moving deeper into the fractal structure of the chart, all of the correction’s subwaves are in their final waves, until the 6th level down, when a rising 3rd wave that began on December 6, 2023 peaked overnight. Declining wave 4 has begun: Wave 4{-8} on the chart.

The 4th wave will retrace a portion of the preceding, typically ending in the 4th subwave of the preceding 3rd wave. That small subwave, wave 4{-9} on the chart, began from 4830.75 and ended at 4743.25. That’s the target range for wave 4{-8}.

What are the alternatives? There are two:

Alternative #1: It’s possible that the January 2 peak was the end of wave 5{-8}. If that proves to be the case, then the large 2nd wave — wave 2{-2} on the chart — ended at that peak, and wave 3{-2} has begun its energetic decline that will carry the price below the start of the preceding 1st wave — 3491.58 — and perhaps significantly below.

Alternative #2: It’s also possible that wave 2{-2} will take a compound form, containing two or three corrective patterns. if that proves to be the case, then the present declining is an X wave, separating the first corrective pattern, which ended overnight, from the second corrective pattern.

[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:

• A downtrend, wave 4{-1}, began on January 4, 2022 and is underway.
• Within wave 4{-1}, an upward correction, wave 2{-2}, began on October 13, 2022.
• The third wave of the correction, wave C{-3}, is underway.
• Wave C{-3} has reached its 5th and final subwave, wave 5{-4} and a series of smaller 5th waves, down to wave 5{-7}.
• Within wave 5{-7}, the next-to-the-last subwave is underway, wave 4{-8}, a decline that began on January 2, 2024.

Alternative #1:

• Wave 5{-8}, the final wave of the upward correction, ended on January 2, also ending wave C{-3} and the upward correction, wave 2{-2}.
• Wave 3{-2} is underay.

Alternative #2:

• Wave 2{-2} is taking a compound form.
• The first corrective pattern ended on January 2, the end of wave C{-3}.
• A declining connector wave is underway, wave X{-3}.

We Are Here.

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

• S&P 500 Index:
• 5{+3} Supercycle, 7/8/1932, 4.40 (up)
• 5{+2} Cycle, 12/9/1974, 60.96 (up)
• 5{+1} Primary, 3/6/2009, 666.79 (up)
• 5{0} Intermediate, 12/26/2018, 2346.58 (up)
• S&P 500 Futures and index:
• 4{-1} Minor, 1/4/2022, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 2{-2} Minute, 10/13/2022, 3491.58 (up)
• C{-3} Minuette, 10/27/2023, 4122.25 (up)

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, January 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 fell into the 4790s during the session and then rose slightly. The further the price falls, the more likely it is that the 3rd-wave rise that began on December 6 ended at the December 27 high and the declining 4th wave has begun.

Of course, under the pattern I discussed this morning, it’s certainly possible that the price will rise and reach a higher high — above 4841.50 — demonstrating that the rising 3rd wave is still underway.

This is all happening and a lower degree with the third and possibly final subwave, wave C, within the 2nd-wave upward correction that began on October 27.

Wave 3 or wave 4? Time will tell, as the old cliche puts it. Meanwhile, this morning’s analysis is unchanged. I’ve updated the upper chart, showing the C wave.

1:40 p.m. New York time

Trade. I’ve exited my short Iron Fly position on SPY, one day after entry, on expiration day, for an 8.7% profit and have updated the trade analysis with results.

I’ve decided against entering any short-term trades today that expire on Tuesday, after the New Year’s holiday. A study suggests that the first trading day of the year tends to be more volatile than the average. Since the Iron Fly strategy relies on a low-volatility underlying, prudence suggests that I stay away.

9:35 a.m. New York time

Holiday note. Markets will be closed on Monday, New Year’s Day, with no regular sessions. The S&P 500 E-mini futures will resume trading at 6 p.m. New York time on Monday, and the first Trader’s Notebook of 2024 will be posted Tuesday morning at 9:35 a.m. New York time.

What’s happening now? The S&P 500 E-mini futures bounced from the 4840s to the 4820s overnight, remaining within the range established after the December 27 high retreated slightly.

What does it mean? The chart has been stuck in a pattern for more than a week: Reach a new high within the 2nd-wave upward correction that began on October 13, 2022, navigate sideways for a spell, rise a bit more to a new high, repeat. Each new high is possibly the end of the third and final subwave of the long-running corrective pattern, wave C. And the sideways pattern that has followed each high does nothing to answer the question: Is wave C over or not? So the chart remains in a state of constant ambiguity.

However the ambiguity on the chart is resolved, wave C will be the end of the 2nd-wave upward correction if it takes a simple form, containing one corrective pattern. If it takes a complex form, wave C will be followed by a second corrective pattern, and possibly a third, extending the wave 2 correction.

When wave 2 is complete, it will be followed by a powerful 3rd-wave downtrend that will carry the price down the 3490s, and most likely significantly lower.

Meanwhile, wave 2 and its subwaves will break a rule of Elliott Wave Theory if they move above 4953.25, the starting point of the 1st wave that preceded the present 2nd wave. If such a breakout should happen, then the present analysis will be scrapped and a new analysis put in its place, most likely making the decline that began on January 4, 2022 a subwave of a rising 3rd wave that began in December 2022. The 3rd wave is a subwave of an expanding Diagonal Triangle that began in December 2018.

What are the alternatives? When a price movement is close to its end, each new high is potentially the end of the 3rd subwave of low degree and the beginning of 4th subwave. I’ve chosen to mark wave the 3rd subwave as being underway. There’s an equal likelihood that the 4th subwave has begun its decline. In any case, wave 4 will be followed by rising wave 5, which will complete the much larger corrective pattern.

The chart. Two charts today.

The upper chart — the futures — focuses on wave C within the 2nd-wave upward correction, covering October 22 to the present. I’ve superimposed a Fibonacci retracement ladder over the upper chart, in red, showing how close the price has come to the 100% retracement level, which is also the starting point of preceding wave 1, the ceiling on wave 2’s upward movement under the present analysis.

The lower chart — the index — shows the expanding Diagonal Triangle that began in December 2018 in its entirety so far, providing context for the relatively small-scale dramas playing out on the upper chart.

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

[S&P 500 index at 9:30 a.m., 3-day bars]

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

Principal Analysis:

• A downtrend, wave 4{-1}, began on January 4, 2022 and is underway.
• Within wave 4{-1}, an upward correction, wave 2{-2}, began on October 13, 2022.
• The third wave of the correction, wave C{-3}, is underway.
• Wave C{-3} has reached its 5th and final subwave, wave 5{-4} and a series of smaller 5th waves, down to wave 5{-7}.
• Within wave 5{-7}, the middle subwave is underway, wave 3{-8}, an uptrend, began with the December 6 low.

Alternative Analysis:

• Within wave 5{-7}, the next-to-the-last subwave is underway, wave 4{-8}, a downward correction, began with the December 27 high.

We Are Here.

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

• S&P 500 Index:
• 5{+3} Supercycle, 7/8/1932, 4.40 (up)
• 5{+2} Cycle, 12/9/1974, 60.96 (up)
• 5{+1} Primary, 3/6/2009, 666.79 (up)
• 5{0} Intermediate, 12/26/2018, 2346.58 (up)
• S&P 500 Futures and index:
• 4{-1} Minor, 1/4/2022, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 2{-2} Minute, 10/13/2022, 3491.58 (up)
• C{-3} Minuette, 10/27/2023, 4122.25 (up)

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, December 29, 2023

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.

Symbol traded today: SPY (1DTE)

I entered a short Iron Fly position on SPY, one day before expiration, and exited for an 8.7% profit.

SPY short Iron Fly

LOT:	23	ENTRY DATE:	12/28/2023
		EXIT DATE:	12/29/2023
		DAYS HELD:	1

Entry and Exit

METRIC	CREDIT	DEBIT	CHANGE	CHANGE %	ANNUALIZED CHANGE %
Options premium	$ 1.88	$ 1.73	$ 0.15	8.7%	3147%
METRIC	ENTRY	EXIT	CHANGE	CHANGE %	ANNUALIZED CHANGE %
Stock price	$ 477.26	$ 476.49	$ 0.77	-0.16%	-59%
Impllied Volatility Rate	4.3	5.4	1.1
Days to expiration	1	0

The structure of the position

STRUCTURE	STRIKE	ODDS EXPIRE OTM	DELTA	IN PRICE	OUT PRICE	NET PRICE
Calls
Long	480.00	80.0%	20	$ (0.34)	$ 0.08	$ (0.26)
Break-even	478.88	63.5%	37
Short	477.00	47.0%	54	$ 1.44	$ (0.74)	$ 0.70
Puts
Short	477.00	54.0%	46	$ 1.08	$ (1.32)	$ (0.24)
Break-even	475.88	69.0%	31.5
Long	474.00	84.0%	17	$ (0.31)	$ 0.26	$ (0.05)
						======
				`	NET TOTAL:	$ 0.15

Risk and Reward

Per contract:
Reward	188.00
Risk	112.00
R/R Ratio (n:1)	0.6

By Tim Bovee, Portland, Oregon, December 28-29, 2023

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 remained below the overnight high, 4841.50, working its way down to the 4820s as the closing bell approached. No changes in this morning’s analysis, except to add an important note: The lower the price goes, the more likely the alternative analysis becomes. The alternative scenario says the 4th subwave of the low degree wave that I’m tracking began at the that high. I’ve updated the chart.

1:50 p.m. New York time

Trades. I exited a short Iron Fly options position on XSP for a 21.2% profit and entered short Iron Fly position on SPY that expires the next day. Both exchange-traded funds are based on the S&P 500 Index. I alternate between them on these very short-term positions to avoid triggering the SEC’s Pattern Day Trader sanctions.

I’ve updated the XSP trade analysis with results and posted an analysis of the SPY trade.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose into the 4840s overnight.

What does it mean? The final subwave, wave C, of a 2nd-wave upward corrective pattern that has been underway for 14 months continues. Four levels of increasingly smaller subwaves are in their last legs, and the fifth level is the middle wave of five.

The overnight peak was a new high for the wave 2 correction.

What are the alternatives? When a price movement is close to its end, each new high is potentially the end of the 3rd subwave of low degree and the beginning of 4th subwave. I’ve chosen to mark wave the 3rd subwave as being underway. There’s an equal likelihood that the 4th subwave has begun its decline. In any case, wave 4 will be followed by rising wave 5, which will complete the much larger corrective pattern.

[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:

• A downtrend, wave 4{-1}, began on January 4, 2022 and is underway.
• Within wave 4{-1}, an upward correction, wave 2{-2}, began on October 13, 2022.
• The third wave of the correction, wave C{-3}, is underway.
• Wave C{-3} has reached its 5th and final subwave, wave 5{-4} and a series of smaller 5th waves, down to wave 5{-7}.
• Within wave 5{-7}, the middle subwave is underway, wave 3{-8}, an uptrend, began with the December 6 low.

Alternative Analysis

• Within wave 5{-7}, the next-to-the-last subwave is underway, wave 4{-8}, a downward correction, began with the December 27 high.

We Are Here.

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

• S&P 500 Index:
• 5{+3} Supercycle, 7/8/1932, 4.40 (up)
• 5{+2} Cycle, 12/9/1974, 60.96 (up)
• 5{+1} Primary, 3/6/2009, 666.79 (up)
• 5{0} Intermediate, 12/26/2018, 2346.58 (up)
• S&P 500 Futures and index:
• 4{-1} Minor, 1/4/2022, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 2{-2} Minute, 10/13/2022, 3491.58 (up)
• C{-3} Minuette, 10/27/2023, 4122.25 (up)

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, December 28, 2023

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.

Symbols traded: XSP

I entered a short Iron Fly position on XSP and exited the next day, expiration day, for a profit.

XSP short Iron Fly

LOT:	4	ENTRY DATE:	12/27/2023
		EXIT DATE:	12/28/2023
		DAYS HELD:	1

Entry and Exit

METRIC	CREDIT	DEBIT	CHANGE	CHANGE %	ANNUALIZED CHANGE %
Options premium	$ 1.60	$ 1.32	$ 0.28	21.2%	7700%
METRIC	ENTRY	EXIT	CHANGE	CHANGE %	ANNUALIZED CHANGE %
Stock price	$ 478.18	$ 478.91	$ (0.73)	0.15%	56%
Impllied Volatility Rate	4.6	4.3	-0.3
Days to expiration	1	0

The structure of the position

STRUCTURE	STRIKE	ODDS EXPIRE OTM	DELTA	IN PRICE	OUT PRICE	CHANGE
Calls
Long	481.00	85.0%	17	$ (0.24)	$ 0.16	$ (0.08)
Break-even	480.60	73.0%	30
Short	479.00	61.00%	43	$ 0.85	$ (0.82)	$ 0.03
Puts
Short	479.00	39.0%	57	$ 1.28	$ (0.75)	$ 0.53
Break-even	477.60	59.0%	37.5
Long	476.00	79.0%	18	$ (0.29)	$ 0.09	$ (0.20)
						======
					NET TOTAL:	$ 0.28

Risk and Reward

Per contract:
Reward	160.00
Risk	90.00
R/R Ratio (n:1)	0.6

By Tim Bovee, Portland, Oregon, December 27-28, 2023

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 from the session high, 4835, back to below 4820. Wave C, the final wave of a corrective pattern in wave 2, an upward correction, continues to play out its end game. I’ve updated the chart.

1:45 p.m. New York time

Trades. I exited my short Iron Fly positions on SPY and QQQ, on expiration day, one day after entry. The SPY position produced a 20.3% profit, and the QQQ position, a much less impressive 2.2% profit. I’ve updated the trade analysis with results.

I entered a short Iron Fly position on XSP, one day before expiration, with the intent of existing on expiration day, and have posted a trade analysis.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures moved to a new high overnight, 4834.50, in the rise that began on October 27. The high forces a reassessment how which subwave is in progress within that rise.

What does it mean? The big picture is unchanged. A 2nd wave upward correction that began on October 13 continues and is in the 3rd and final subwave of the corrective pattern, wave C.

Wave C is almost complete, in 5th and final waves across four degrees lower. In the fifth degree lower, I had labeled declining wave 4 as having begun on December 20. The quick reversal to a new high confirms that rising wave 3 is still underway, and I have relabeled the chart accordingly, promoting the wave 3 alternative to principal analysis.

See the December 26 Trader’s Notebook for a chart showing the prior labeling.

What are the alternatives? As is always the case with a new high at this point in the C wave, each new high could be the end of the 3rd subwave and the beginning of 4th subwave.

[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:

• A downtrend, wave 4{-1}, began on January 4, 2022 and is underway.
• Within wave 4{-1}, an upward correction, wave 2{-2}, began on October 13, 2022.
• The third wave of the correction, wave C{-3}, is underway.
• Wave C{-3} has reached its 5th and final subwave, wave 5{-4} and a series of smaller 5th waves, down to wave 5{-7}.
• Within wave 5{-7}, the middle subwave is underway, wave 3{-8}, an uptrend, began with the December 6 low.

Alternative Analysis

• Within wave 5{-7}, the next-to-the-last subwave is underway, wave 4{-8}, a downward correction, began with the December 27 high.

We Are Here.

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

• S&P 500 Index:
• 5{+3} Supercycle, 7/8/1932, 4.40 (up)
• 5{+2} Cycle, 12/9/1974, 60.96 (up)
• 5{+1} Primary, 3/6/2009, 666.79 (up)
• 5{0} Intermediate, 12/26/2018, 2346.58 (up)
• S&P 500 Futures and index:
• 4{-1} Minor, 1/4/2022, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 2{-2} Minute, 10/13/2022, 3491.58 (up)
• C{-3} Minuette, 10/27/2023, 4122.25 (up)

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, December 27, 2023

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.

Symbols traded: QQQ SPY

I entered short Iron Fly positions on QQQ and SPY, one day prior to expiration, and exited a day later, each for a profit..

QQQ short Iron Fly

LOT:	`12	ENTRY DATE:	12/26/2023
		EXIT DATE:	12/27/2023
		DAYS HELD:	1

Entry and Exit

METRIC	CREDIT	DEBIT	CHANGE	CHANGE %	ANNUALIZED CHANGE %
Options premium	$ 1.90	$ 1.86	$ 0.04	2.2%	781%
METRIC	ENTRY	EXIT	CHANGE	CHANGE %	ANNUALIZED CHANGE %
Stock price	$ 410.38	$ 411.30	$ (0.92)	0.22%	82%
Impllied Volatility Rate	13.1	8.3	-4.8
Days to expiration	1	0

The structure of the position

STRUCTURE	STRIKE	ODDS EXPIRE OTM	DELTA	IN PRICE	OUT PRICE	NET PRICE
Calls
Long	413.00	82.0%	18	$ (0.29)	$ 0.29	$ –
Break-even	411.90	63.5%	36
Short	410.00	45.0%	54	$ 1.45	$ (1.83)	$ (0.38)
Puts
Short	410.00	56.0%	46	$ 1.03	$ (0.36)	$ 0.67
Break-even	408.90	70.0%	31.5
Long	407.00	84.0%	17	$ (0.29)	$ 0.04	$ (0.25)
						======
				`	NET TOTAL:	$ 0.04

Risk and Reward

Per contract:
Reward	190.00
Risk	110.00
R/R Ratio (n:1)	0.6

---

SPY short Iron Fly

LOT:	22	ENTRY DATE:	12/26/2023
		EXIT DATE:	12/27/2023
		DAYS HELD:	1

Entry and Exit

METRIC	CREDIT	DEBIT	CHANGE	CHANGE %	ANNUALIZED CHANGE %
Options premium	$ 1.78	$ 1.48	$ 0.30	20.3%	7358%
METRIC	ENTRY	EXIT	CHANGE	CHANGE %	ANNUALIZED CHANGE %
Stock price	$ 475.20	$ 475.50	$ (0.30)	0.06%	23%
Impllied Volatility Rate	10.0	9.5	-0.5
Days to expiration	1	0

The structure of the position

STRUCTURE	STRIKE	ODDS EXPIRE OTM	DELTA	IN PRICE	OUT PRICE	NET PRICE
Calls
Long	478.00	85.0%	15	$ (0.19)	$ 0.08	$ (0.11)
Break-even	476.78	65.5%	34.5
Short	475.00	46.0%	54	$ 1.27	$ (0.53)	$ 0.74
Puts
Short	475.00	55.0%	46	$ 0.97	$ (1.08)	$ (0.11)
Break-even	473.78	70.0%	30.5
Long	472.00	85.0%	15	$ (0.26)	$ 0.05	$ (0.21)
						======
				`	NET TOTAL:	$ 0.31

Risk and Reward

Per contract:
Reward	178.00
Risk	122.00
R/R Ratio (n:1)	0.7

By Tim Bovee, Portland, Oregon, December 26-27, 2023

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, from the 4810s into the 4830s. Wave C within the ongoing 2nd-wave upward correction continues and is in its end game. I’ve udpated the chart.

1:45 p.m. New York time

Trades. I exited my short Iron Condor position on XSP for a 20.9% profit. I entered the position on Friday, December 22, four days before expiration, and held until expiration day today, after the Christmas holiday, making it a 4DTE play. I’ve updated the trade analysis with results.

I entered two new positions, on QQQ and SPY, that will expire the next day, on Wednesday, December 27, making them 1DTE plays. I’ve posted an analysis of the trades.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures traded narrowly in the low 4800s after trading resumed overnight. The price remained below the December 19 high, 4830.75.

What does it mean? The C wave of a wave-2 upward correction has been underway since October 27 and in its final stages. At play is a small wave four degrees lower than the C wave. Within that small 5th wave, the next-to-the-last subwave, declining wave 4, is now underway.

That 4th wave began on December 19. It will be followed by a rising 5th wave that will complete its low degree parent 5th wave, and a series of 5th wave up to wave C, which will also be complete. Most often with 2nd waves, that C wave will also end the correction. Sometimes a correction will take a compound form, containing two or three corrective patterns. There’s no way to forecast whether a correction will take a simple or complex form. We can only note it when it happens and analyze the chart accordingly.

What are the alternatives? As is often the case with Elliott Wave Theory, there are several ways to analyze the chart.

One possibility is that the wave in play is still a rising 3rd wave. If this is the case, the price will reverse and rise above the December 19 high, 4830.75

It’s also possible to count the low degree wave 3 as having ended on December 14. If that proves to be the case, then the December 19 high was the end of the 5th subwave buried within the C wave of the correction, the correction may have ended along with that C wave, and the decline that followed is the early stage of a downtrending 3rd wave that will carry the price a great deal lower.

[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 underlie the analyses.

Principal Analysis:

• A downtrend, wave 4{-1}, began on January 4, 2022 and is underway.
• Within wave 4{-1}, an upward correction, wave 2{-2}, began on October 13, 2022.
• The third wave of the correction, wave C{-3}, is underway.
• Wave C{-3} has reached its 5th and final subwave, wave 5{-4} and a series of smaller 5th waves, down to wave 5{-7}.
• Within wave 5{-7}, the next-to-the-last subwave is underway, wave 4{-8}, a downward correction, began with the December 19 high.

Alternative #1:

• Within wave 5{-7}, the middle subwave, rising wave 3{-8}, is still underway.

Alternative #2:

• Within wave 5{-7}, the final subwave, rising wave 5{-8}, ended on on December 19, also compketing wave C{-3} and most likely ending wave 2{-2}. Downtrending wave wave 3{-2} on December 19 began what will prove to be a robust decline.

We Are Here.

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

• S&P 500 Index:
• 5{+3} Supercycle, 7/8/1932, 4.40 (up)
• 5{+2} Cycle, 12/9/1974, 60.96 (up)
• 5{+1} Primary, 3/6/2009, 666.79 (up)
• 5{0} Intermediate, 12/26/2018, 2346.58 (up)
• S&P 500 Futures and index:
• 4{-1} Minor, 1/4/2022, 4953.25 (down) (futures), 4818.62 (down) (index)
• S&P 500 Futures:
• 2{-2} Minute, 10/13/2022, 3491.58 (up)
• C{-3} Minuette, 10/27/2023, 4122.25 (up)

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, December 26, 2023

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.