Live: Monday, Feb. 12, 2018

2/12 – 4 p.m. New York time

I exited three positions today — GLDMGM and QQQ — and entered none. All three analyses have been updated with results.

2/12 – 3:30 p.m. New York time

I have exited MGM for a profit.

2/12 – 3 p.m. New York time

In my discussion of exchange-traded funds, below at 12:10 p.m., I noted than IWM was showing mixed signals as measured by the Fisher Transform (FT), uptrending on the 3-hour and downtrending on the 1-day charts. The ambiguity has been resolved with the 1-day FT moving to uptrending, placing IWM in my pile of counter-trend symbols that I won’t trade today.

2/12 – 2:45 p.m. New York time

I have updated GLD and QQQ with results.

2/12 – 12:10 p.m. New York time

Of the 44 exchange-traded funds in my pool, 25 are downtrending as measured by the Fisher Transform, and 19 are uptrending.

Only three of the downtrending ETFs are unreservedly so; the rest are downtrending on the 1-day hart but uptrending on the 3-hour chart, which tends to lead the daily (but which also has more whipsaws).

‘The three downtrending ETFs at both levels of granularity are are IWM, VIX and VXX. The IWM tracks the Russell 2000 and so has a broader range of company sizes in its mix compared to the S&P 500 and the Dow. Therefore, it sometimes diverges.

However, when I compare the IWM chart with that for SPY, I see the same Elliott Wave count, placing the symbol in an upward correction within a downtrend. So I’m passing on the trade for now.

2/12 10:30 a.m. New York time

I’ve completed my initial screen of earnings plays for acton the week beginning Feb. 2. It is important to remember in considering the discussion below that the prospets lists are based on volatile metrics — today’s prospect and tomorrow’s, or even this afternoon’s, reject, and vice versa.

At this point the screening has produced no items for my agenda. Here’s how I got there.

I have 14 potential earnings plays using options in my pool, after removing those that show a sign mismatch between the Fisher Transform and the Zacks earnings surprise predictor.


sym earns meridian action
ACAD 20180227 xm 20180226
DISH 20180228 xm 20180227
IONS 20180227 xm 20180226
JD 20180301 xm 20180300
SQ 20180227 pm 20180227
THC 20180226 pm 20180226


sym earns meridian action
BBY 20180301 am 20180300
DDD 20180228 pm 20180228
EOG 20180227 pm 20180227
FIT 20180228 pm 20180228
LOW 20180228 am 20180227
MYL 20180307 pm 20180307
PRGO 20180227 am 20180226
VALE 20180227 xm 20180226

None of the downtrending symbols have usable bid/ask spreads at this point. I require a 10% spread or less. Two have spreads below 15% and so are close to qualifying: DISH and JD.

Two of the uptrending symbols meet my bid/ask standard, FIT and VALE, and two more are close — below 15% — EOG and LOW. Since FIT and VALE are uptrending, and since, based on sad experience, I loathe counter-trend trades, I shall keep a watch on them and consider them if the trend should change.

I have a pool of 36 symbols that qualify as potential earnings plays using shares. Shares plays must be bullish, and given the contrarian nature of such plays, I am setting them all aside for now.

For the record, the potential shares plas are:

sym earns meridian action
AMC 20180301 am 20180300
ATRC 20180226 pm 20180226
AZO 20180227 xm 20180226
BBY 20180301 am 20180300
BMO 20180227 am 20180226
BOX 20180228 pm 20180228
CNQ 20180301 am 20180300
CQP 20180227 xm 20180226
DISCA 20180227 am 20180226
DSGX 20180305 pm 20180305
EOG 20180227 pm 20180227
EYE 20180301 xm 20180300
FIT 20180228 pm 20180228
FRAC 20180226 pm 20180226
GPT 20180228 pm 20180228
HZNP 20180228 am 20180227
INWK 20180227 pm 20180227
JCAP 20180228 pm 20180228
KNSL 20180226 pm 20180226
LB 20180228 pm 20180228
LOW 20180228 am 20180227
MEDP 20180226 pm 20180226
MEI 20180301 xm 20180300
MGNX 20180227 xm 20180226
MYL 20180307 pm 20180307
OAS 20180228 xm 20180227
PDCE 20180226 pm 20180226
PRGO 20180227 am 20180226
RDC 20180228 am 20180227
RRC 20180227 pm 20180227
SAH 20180227 am 20180226
SBLK 20180228 xm 20180227
SERV 20180227 am 20180226
SYNH 20180228 am 20180227
TOL 20180227 am 20180226
VALE 20180227 xm 20180226

2/12 10:10 a.m. New York time

Now with the correction of the “correction” — the S&P 500 and the Dow are up slightly at the opening bell — comes the inevitable question of definition: Is this the beginning of the end of the downtrend from Jan. 26, or is it mere upward correction within a downtrend that will ultimately carry us to depths unseen for years?

Given the length of the uptrend since 2009 — the second longest bull market since the one that followed World War II — I judge that the major downtrend scenario is most likely, buttressed by a persuasive Elliott Wave count that shows five waves up since 2009 at levels of granularity great and small.

So I shall continue to trade within the bear market scenario, counting on the Fisher Transform on the daily chart to tell me when I’m wrong.

The magic number is 26,616.71 on the Dow. If the index exceeds that level, then the decline since Jan. 26 was indeed a correction, and the  bull market is still in progress.

I will note that the Fisher Transform on the weekly chart continues to signal a downtrend on both the S&P 500 and the Dow. A switch to uptrending at that level of granularity would signal an upward correction within the downtrend of significant magnitude.

2/12 – 9:50 a.m. New York time

GLD and QQQ moved to uptrending signals on the Fisher Transform,, and I exited my bear positions. I shall update their analyses with later today.

By Tim Bovee, Portland, Oregon, Feb. 12, 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.

Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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