Live: Thursday, May 10, 2018

5/10 – 3:15 p.m. New York time

Having moved above the April 18 peak, SPY in my opinion will continue to zig and zag for weeks. My options position on SPY doesn’t expire until mid-June, and the declines within the complex correction will provide exit opportunities, especially as increasing Theta — the measure of time decay — decreases the cost of exiting the position.

Regarding my shares plays, I go by the rule that I play movements in the direction of the larger trend, which since Jan. 26 has been down at the Primary degree in Elliott wave analysis. However, the correction within that downtrend is uptrending. That implies that I would want to play the A and C waves, while sitting out the B waves.

And so I shall do, using the daily Fisher Transform as a signal for entering and exiting SPXL as a triple-leverage bull play on the S&P 500. (The bear leveraged counterpart is SPXU.)

No trades today.

5/10 – 12:40 p.m. New York time

SPY has moved above the April 18 high of $271.30, the 2nd wave peak in the primary degree. Therefore, I have altered my count to show a more complex pattern developing, composed of several patterns linked together.

A 30-day chart of SPY with 15-minute bars.


5/10 – 10:25 a.m. New York time

SPY remain just barely below the $271.30 level. As of this morning there is no need to act on my bear position on SPY using options, nor to enter a shares trade.

Why is the $271.30 level important? It has to do with the rules and guidelines for Elliott wave analysis of charts.

The red line in the SPY chart below, taken just a few moments ago, marks the April 18 peak of $271.30. That peak marked the beginning of Wave 1 to the downside of the Minute degree.

SPY is now working through a Wave 2 correction to the upside in the same degree. The rules state that a 2nd wave cannot move beyond the starting point of the preceding 1st wave of the same degree. If the count shows it doing so, then the count is incorrect; something else going on.

So far, that rule has not come into play and the present count stands. If it the $271.30 level is breached, then I shall redo the count and figure out what that “something else going on” is.

The chart below covers SPY for 30 days with 15-minute bars.


By Tim Bovee, Portland, Oregon, May 10, 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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