Live: Wednesday, Feb. 7, 2018

2/7 – 3:20 p.m. New York time

In today’s outcomes, I entered an options position on QQQ and shares positions on HUN and MATX. I exited no positions.

2/7 – 2:40 p.m. New York time

I have entered earnings plays using shares on HUN and MATX.

2/7 – 2:15 p.m. New York time

I have entered a bear call vertical spread on QQQ.

2/7 – 1:45 p.m. New York time

The broad markets have returned to downtrending as measured by the Fisher Transform at the 3-hour level of granularity. This has brought the 3-hour and daily FT measures back into sync on a number of exchange-traded funds.

Among them are the majors: SPY tracking the S&P 500 and QQQ tracking the NASDAQ. QQQ has higher implied volatility than does SPY, so QQQ will be my focus for opening a new position.

Here is a list, current as of this writing, of exchange-traded funds that are measured as downtrending by the Fisher Transform at both the 3-hour and daily levels, and who also have implied volatility above the 50th percentile of its levels throughout the past year, sorted in descending order by IV percentile.

Symbol FTtrend-3h FTtrend-daily IV_Percentile
EWY -1 -1 100
FXI -1 -1 98.38
OIH -1 -1 84.23
EEM -1 -1 82.28
RSX -1 -1 81.51
TLT -1 -1 79.83
SPXU -1 1 75.98
VIX -1 -1 73.47
VXX -1 -1 73
LQD -1 -1 71.97
EFA -1 -1 69.18
QQQ -1 -1 67.3
XOP -1 -1 63.05
IEF -1 1 63.03
GLD -1 -1 60.4
SLV -1 -1 55.75
EWZ -1 -1 51.54
SPY -1 -1 50.7

2/7 – 10:15 a.m. New York time

I found no earnings plays using options that I would care to trade. I looked only at stocks with downtrending metrics, and their bid/ask spreads were too wide for my standards.

I found two potential earnings plays using shares. My shares trades are bullish by definition, and uptrending is counter to how I see the market. Nonetheless, I’m willing to take greater risks with shares than with options because shares aren’t leveraged. I looked both at the metrics and then confirmed them on the chart itself, using the built-in pattern recognition that is the birthright of all in our species to confirm that the hart was indeed bullish

That yielded two prospects for my agenda: HUN and MATX.

A run through of my pool of exchange-traded funds shows most are uptrending on the 3-hour FT metric, even if downtrending on the daily.

The fully downtrending ETFs at both levels of granularity are the metals — GLD, gold mining, SLV — and natural gas — UNG, as well as the Euro/Dollar exchange (FXE), emerging markets (EEM), South Korea (EWY), China (FXI) and Russia (RSX).

Two ETFs have new uptrend signals on the daily charts: Metals and mining (XME) and oil/gas (XOP),

I’ll look at the downtrending plays today to see if any really interest me. With earnings plays having pretty much dried up as earnings season wanes, ETFs are the best game in town, thanks to the markets’ increased implied volatility.

2/7 – 9:40 a.m. New York time

No exits in the first rush of trading this morning . GLD remains downtrending at all levels of granularity that I’m tracking using the Fisher Transform (FT) metric. MGM continues to be uptrending on the 3-hour FT, but downtrending at the daily and weekly levels.

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


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.

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