Live: Tuesday, Aug. 14, 2018

3 p.m. New York time

I have updated the SPY analysis with results and a chart talk decontructing how the position fared.

1:35 p.m. New York time

I have exited my position in SPY for a loss and shall update the initial analysis with results.

11:40 a.m. New York time

SPY this morning, as yesterday, is trading within the prior day’s range. The position expires Friday, and I shall roll out of it today and pick my re-entry point for the next bear play. This position will produce a loss..

By Tim Bovee, Portland, Oregon, Aug. 14, 2018

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Live: Monday, Aug. 13, 2018

9:50 a.m. New York time

SPY this morning is trading within the prior day’s range. In Elliott wave terms, at a very low degree the downward wave that began Friday is in a 4th wave counter-trend correction. (See Friday’s chart.) These are very small movements that have little significance to most human traders; the downward movement has only just begun and has much distance to travel before it reaches its end.

I anticipate no trades today.

By Tim Bovee, Portland, Oregon, Aug. 13, 2018

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The Week Ahead: Productivity, retail, industry, housing

Productivity

Productivity, 1988-2017

The always important question of productivity takes center stage this week, along with the retail, housing and industrial sectors.

The quarterly productivity and costs report will be published Wednesday at 8:30 a.m. New York time. As the chart above shows, productivity peaked in 2002, hit a lower high in 2011, and thereafter fell into a narrow range in the cellar. Economists consider productivity to be the source of growth.

The chart of productivity below shows just how dramatic the long-term change has been. We are back in the 1970s, and traders of a certain age know all too well what that meant back in the day: Massive job losses, the dismantling of the American industrial sector, stagflation. Not a happy chart.

productivity1947

So economists for sure and many traders as well will be paying attention when the report is released.

The sector reports will be concentrated on Wednesday and Thursay.

Expect retail sales on Wednesday at 8:30 a.m., concurrently with productivity, and industrial production 45 minutes later at 9:15 a.m. Housing starts will be published on Thursday at 8:30 a.m.

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Live: Friday, Aug. 10, 2018

10:30 a.m. New York time

SPY has peaked and this morning began its next Elliott wave down. I count it as a B wave with an ongoing correction. It could rather be a 3rd wave down. As the movement progresses I’ll adjust my count as needed.

The SPY chart covers 10 days using 5-minute bars.

spy20180810

My position on SPY expires at the end of next week. My intent is to hold on until perhaps as late as Wednesday, and then exit. On Monday, when I have more verification that this is indeed the beginning of the downward wave, then I shall consider when I should entered the next position with a later expiration.

By Tim Bovee, Portland, Oregon, Aug. 10, 2018

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Live: Thursday, Aug. 9, 2018

9:40 a.m. New York time

SPY has for a third day begun trading in a very narrow range. A traditional chartist would look at SPY, nod sagely, and mutter, “Topping behavior.”

The position expires Aug. 17. I’m going to give it a bit more time in the hope that the topping will turn into a price collapse and return my position to profitability.

The SPY chart covers one month with daily bars. The subchart is the Fisher Transform Trend, which produces a binary true (high) or false signal on Fisher crosses.

spy20180809

By Tim Bovee, Portland, Oregon, Aug. 9, 2018

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Live: Wednesday, Aug. 8, 2018

11:25 a.m. New York time

SPY pulled back from a high yesterday that could mark a significant turning point int the Elliott wave analysis, but not necessarily. I shall be waiting for the market to work out its path and anticipate no trades.

Yesterday afternoon, for the enjoyment of doing the analysis, I took a look at TSLA, running a long-term Elliott wave chart that suggested that the price was moving as expected, not being pushed into a surprising direction by Tesla CEO Elon Musk’s tweet saying he hopes to take the company private..

This morning in Seeking Alpha, I ran across a smart analysis of the business and regulatory realities of privatizing Tesla: “Tesla: Separating Fact From Fiction“. It’s a good read.

By Tim Bovee, Portland, Oregon, Aug. 8, 2018

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TSLA Analysis – Just for fun

Today’s market shock after Tesla CEO Elon Musk tweeted that he was considering taking TSLA private illustrated an important point about Elliott wave analysis: The analytical technique operates independently of items in the news, and yet traders mob response to news often confirms the analysis found through Elliott.

So it was with TSLA. For background, here’s an article from Reuters on Musk’s tweet.

The TSLA chart below is the broadest possible, beginning in 2010, when the company went public, and ending with today’s impactful tweet. The chart uses weekly bars.

tsla20180808

In counting the Elliott waves, I’ve made no attempt to relate the degrees of each wave to the broader market. The numbering scheme is relative; the numbers without modifiers are the highest degree counted, and the ones with {-1} after the number are one degree down.

My count shows that TSLA had begun to edge up from a low several days prior to the tweet. The response to the tweet confirmed that an upward wave was underway.

It’s a 5th wave at the lower degree with a greater 3rd wave, so it should have some serious legs, although a movement above the September 2016 high of 389.61 is all that is required to satisfy Elliott’s definition of a 5th wave in these cirumstances.

However far it goes, once the 5th wave and its parent 3rd wave are complete, TSLA will be set for a significant decline spanning several years.

If Musk takes the company private, of course, then Elliott has nothing more to say. The analysis requires a liquid market — the more liquid the better — because it relies on social mood. When the market is illiquid, then social mood becomes unreadable.

Musk has said that he intends to find a way so that even after going private, he wants shareholders to be able to continue to have a stake in the company. Whether that options would include a private market of some sort, and whether that pricing would be publicly available, I can’t even guess.

I have no intention of buying into TSLA. I’m not a long-term trader, so Mr. Musk and his investors will sail off to the future, of electric cars, high-speed underground railroads and a colony on Mars, without me on board. Bon voyage, mes chers amis. Bon voyage.

By Tim Bovee, Portland, Oregon, Aug. 7, 2018

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Live: Tuesday, Aug. 7, 2018

10:35 a.m. New York time

By my  Elliott wave count, we’re at a turning point in the counter-trend rise that began April 2.

In the chart below, I focus on the final wave, a 5th wave of the Minuscule degree {-4}, and it’s internal waves, at a level so small it lacks a name. Let’s agree to call it the “Tiny”. By my count, SPY is in the 5th wave of the Tiny degree {-5}.

The chart covers Aug. 1 to the present, with 5-minute bars.

spy20180807

By “turning point” I mean that the first leg of the counter trend correction, the A wave of Submicro degree {-3} is nearing completion, to be followed by a downward B wave, which often has three waves internally, and then a C wave to the upside that will complete the 2nd wave of Micro degree.

The proper identification of degrees is always a matter of ambiguity in Elliott. But for my purposes what counts is the relationship among the waves — how far along as the price movement progressed. In that latter respect Elliott wave analysis can be made with great confidence.

My present position expires Aug. 17. It is loss-making at this point. Given how far advanced the A wave is, the rational choice is to delay until the last possible moment before getting out.

Or as the Earth-child raised by Martians, Valentine Michael Smith, put it in Robert A. Heinlein’s 1961 masterwork Stranger in a Strange Land, “Waiting is.”

By Tim Bovee, Portland, Oregon, Aug. 7, 2018

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