IWM Analysis

iShares Russell 2000 ETF (IWM)

Update 4/2/2018: Big caps, small caps — whatever the size of the underlying company, shares continued the broad decline that began in late January. A Monday session added another downward dip to the charts, and I exited IWM for a $0.60 debit, or 63.2% of maximum potential profit, with shares at $148.89.

IWM’s shares declined by 2.5% over my 33-day holding period, or a -27% annual rate. The options position produced a 171.7% return for a +1,899% annual rate.


.I have entered a short vertical spread on IWM, using options that trade for the last time 51 days hence, on April 20. The premium is a $1.63 credit and the stock at the time of entry was priced at $152.65.

I made the decision to enter the trade in my account based on a Fisher Transform switch to a downtrending signal within the context of a bearish Elliott wave count.

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GLD Analysis

SPDR Gold Shares (GLD)

Update 3/29/2018: GLD traced a non-trending course after I entered the position, until March 23, when it gapped to the upside and rose higher the day after, peaking just 12 cents below the Feb. 16 high.

In Elliott wave terms, that movement could be seen as the 1st wave of an uptrend, and the drop down in two subsequent days as a 2nd wave correction, allowing for a bullish interpretation that was contrary to the direction of my position.

The presumed 2nd-wave decline made the position profitable, and I cashed out at 21.7% of maximum potential profit, below my 50% target but still a reasonable gain.

The options went for a $0.72 debit with shares at $125.46. The shares movement was 0.2% over 29 days for a +2% annual rate. The options position produced a 30.6% return for a 385% annual rate.


I have entered a short vertical spread on GLD, using options that trade for the last time 51 days hence, on April 20. The premium is a $0.94 credit and the stock at the time of entry was priced at $125.24.

I made the decision to enter the trade in my account based on a bearish Elliott wave count and an ongoing downtrend signaled by the Fisher Transform metric..

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FXE Analysis

CurrencyShares Euro ETF (FXE)

Update 3/5/2018: FXE rose sharply on May 1 and the day after, requiring a re-evaluation of the Elliott wave count. The Fisher Transform metric signaled an uptrend on May 2. I exited for a $0.95 debit with the underlying share price at $118.61.

Shares rose by 1.1% over five days, or a +81% annual rate. The options position produced a 33.7% loss for a -2,459% annual rate.

The magnitude of the rise made it impossible, within the Elliott wave rules, to consider the decline from Deb. 26 to still be in force as a 3rd wave to the downside at the Minuette level, which is the level I trade. It is somewhat ambiguous at this level, but I read it as an ongoing 2nd wave, a correction to the upside or sideways that, when complete, will mark the beginning of the 3rd wave.

My goal is to catch that 3rd wave down once it begins, and in the meantime to watch for clarification of the wave pattern.


I have entered a short bear call vertical spread on FXE, using options that trade for the last time 51 days hence, on April 20. The premium is a $0.63 credit and the stock at the time of entry was priced at $117.31.

I made the decision to enter the trade in my account based on a bearish Elliott wave count and a continuing of a downtrend signal from the Fisher Transform metric.

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The Week Ahead: Fed Chair testimony, GDP, durables and global trade

The new Federal Reserve chairman, Jerome Powell, testifies before Congress for the first time as head of the agency, before the House Financial Services Committee on Tuesday and the Senate Banking Committee on Thursday. Each hearing begins at 10 a.m. New York time.

Powell is the first non-economist to head the Fed since William Miller, who served in the post in 1978 and 1979. Miller was CEO of an aerospace/defense company, Textron Inc. (TXT), and Powell was an investment banker at several companies, culminating as a vice president at the no-longer existing Dillon, Read & Co.

And that’s what will keep me glued to the screen throughout the testimony: How will his approach and assessments, given his background, differ from those of the long string of economists that have controlled our money, our prosperity and our ability to earn a living and therefore survive in the world. High stakes, and as traders we need to understand the odds of him having an impact on our results.

Meanwhile, back in the more mundane realm of economic reporting, traders will get a second estimate of gross domestic product for the 4th quarter, on Wednesday at 8:30 a.m. It will be one of a collection of reports that give deep insight into our economic realities: Durable goods orders and international trade in goods, each on Tuesday at 8:30 a.m., and personal income and outlays on Thursday, also at 8:30 a.m.

In addition, new home sales statistics will be published on Monday at 10 a.m.

Back to the Fed, Vice Chairman for Supervision Randal Quarles will give give an assessment of the U.S. economy in an address to the 34th Annual National Association for Business Economics Economic Policy Conference, on Monday at 3:15 p.m. in Washington.

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Live: Thursday, Feb. 22, 2018

2/22 – 3:20 p.m. New York time

I entered no positions today and exited none.

2/22 – 11:25 a.m. New York time

My positions on FXE and GLD remain as they were on Wednesday when I entered them, downtrending as signaled by the Fisher Transform on the daily chart.

I shall exit under two circumstances: 1) A position reaches 50% of its maximum potential profit, or 2) the daily Fisher Transform signals an uptrend.

I’m looking to add one of the broad equity indexes to the mix — SPY or QQQ or IWM — as soon as one gives a Fisher downtrend signal.

By Tim Bovee, Portland, Oregon, Feb. 22, 2018

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GLD Analysis

SPDR Gold Shares (GLD)

Update 2/27/2018: GLD trended downward in line with its Elliott wave count and its Fisher Transform signal. I exited at 41.2% of maximum potential profit for a $-.38 debit. Shares stood at $125.04 upon exit.

I intend to re-enter GLD if the downtrend continues, continuing a series that began in October 2017.

Shares declined by 0.7% over six days for a -43% annual rate. The options position produced a 68.4% return for a +4,162% annual rate.


I have entered a bear call vertical spread on GLD, using options that trade for the last time 23 days hence, on March 16. The premium is a $0.64 credit and the stock at the time of entry was priced at $125.94

I made the decision to enter the trade in my account based on its decline from the high of Feb. 16 and a downtrend signal from the Fisher Transform. 

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