FXE Analysis

CurrencyShares Euro ETF (FXE)

Update 2/27/2018: FXE declined in line with the Elliott wave formation, and I exited at 41.2% of maximum potential profit for a $-0.30 debit. Shares stood at $117.79 upon exit.

At the exit the Fisher Transform and the Elliott wave count both continue to point toward a downtrend, and I intend to re-enter if their present conditions hold, continuing the series that began in October 2017.

Shares declined by 0.% over six days, or a -43% annual rate. The options position produced a 70.0% return for a +4,258% annual rate.

I have entered a bear call vertical spread on FXE, using options that trade for the last time 23 days hence, on March 16. The premium is a $0.51 credit and the stock at the time of entry was priced at $118.63.

I made the decision to enter the trade in my account based on a trend reversal to the downside as measured by the Fisher Transform, within the context of a sharp reversal from the Feb. 16 peak on the chart..

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The Week Ahead: Minutes, home sales, Fed speech and a holiday

U.S. markets will be closed on Monday for the President’s Day holiday. Markets in London, Tokyo and Sydney will be open as usual.

The holiday will kick off a week when economics reports are so sparse as to almost be non-existent.

The Federal Open Market Committee minutes of the Jan. 31 meeting will be published on Wednesday at 2 p.m. New York time. At that meeting FOMC members by unanimous vote kept the interest rate under their control unchanged.

A report on existing home sales, covering the greater part of the housing market, will be released on Wednesday at 10 a.m. The counterpart new home sales report will be published the week after.

And Fed Vice Chairman Randal Quarles will give a speech in Tokyo on a topic that, amid newly volatile markets, might provide insight into monetary regulators’ thinking: “10 years after the Global Financial Crisis: How has the world economy changed and where will it go?” The speech will be delivered to the International Financial Symposium organized by the Institute for International Financial Affairs, on Thursday at 12:15 a.m. New York time.

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Live: Thursday, Feb. 15, 2018

2/15 – 3:05 p.m. New Yor time

No change in the situation today. I am standing down until the market moves in a way favorable to my reading of the trends: We’re in an upward correction in the broad market within a larger downtrend.

In Elliott wave terms, I’m looking for a downward impulse wave at the Minuette degree before re-entering the markets. The Minuette degree is roughly equivalent to the daily Fisher Transform metric that I monitor for trend signals.

2/15 – 11:40 a.m. New York time

The counter-trend rally continues in equities. I anticipate no trades today. In Elliott wave terms, so far the corrective rise has  retraced about 50%, a Fibonacci level, of the downtrend’s 1st wave.

By Tim Bovee, Portland, Oregon, Feb. 15, 2018

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Live: Wednesday, Feb. 14, 2018

2/14 – 3:20 p.m. New York time

I entered no new positions and exited none. In my agenda discussion, below, I mentioned the 3-hour Fisher Transform on the S&P 500 had signaled a return to a downtrend. That reversed after six hours, and the daily and 3-hour Fisher Transform metrics are now in synch as uptrending, in what I consider to be a correction to the larger downtrend.

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The Week Ahead: The economy from end to end

Amidst jittery markets, the economic reports serve up a wide-ranging collection of data covering prices, retail, industry and housing — tracking the economy from end to end.

The big blow-out happens on Thursday, with seven reports worth looking at.

The consumer price index will be published on Wednesday, to be followed the next day by the producer price index final demand, each at 8:30 a.m. New York time.

Retail sales will also be published on Wednesday at 8:30 a.m., and industrial production, on Thursday at 9:15 a.m.

Housing starts will top off the week, on Friday at 8:30 a.m.

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