Live: Friday, March 2, 2018

2/2 – 3:15 p.m. New York time

I have entered no new positions today and exited none.

My FXE bearish position remains problematic, as noted in this morning’s post. The Fisher Transform metric shows it uptrending, and the Elliott wave count shows it in a downtrend.

Having said that, there are some ambiguities about the wave count, so as I try to puzzle out the situation, I am falling back on plain vanilla resistance.

The decline through Thursday began on Feb. 15 from a high of 120.38 on FXE. The rapid decline paused on Feb. 21.

The four-day sideways pattern had a high of 118.87. Today’s counter-trend correction to the upside showed a high of 118.65. So that very low level resistance remains intact.

My present wave count considered the present rise to be a counter-trend correction at the Subminuette degree, with the Feb. 15 high representing the the beginning of a Minuette degree 3rd wave.

A rise above 118.65 near-term resistance would decrease my  confidence in the wave count but would leave it intact. A rise above the 120.38 resistance level of Feb. 15 would lead me to conclude that the wave count is incorrect and that the Subminuette 2nd wave is not complete.

As always with Elliott, time will tell.

2/2 – 10:10 a.m. New York time

FXE, whose underlying is the EUR/USD exchange rate, has given an Fisher Transform uptrend signal on the daily chart. This confits with my Elliott wave count at the Minuette degree, which usually although not always aligns with the Fisher. The Minuette produces waves that generally last about a week, although there are exceptions.

I see FXE as being in the 3rd wave down at the Minuette degree, and the rise this morning as being a 4th wave at the Subminuette degree, one degree smaller.

The options position doesn’t expire until April, so I’m going to not sell immediately, but with instead wait out the Subminuette corrective wave in the expectation of catching the 5th wave down at the Minuette level.

I have no new prospects for today. I took a look at half a dozen potential earnings plays, with the goal of entering the positions in time to catch the pre-earnings moves. The announcements are scheduled for the week beginning March 19.

Since the market is in a downtrend at the level I trade, I need to find earnings plays that have a likelihood of a siginificantly negative earnings surprise. None of these six met that test. The symbols I looked at are FDX, GIS, JBL, ORCL, MU and NKE.

By Tim Bovee, Portland, Oregon, March 2, 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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