Live: Thursday, May 31, 2018

3:10 p.m. New York time

SPY’s price fell a bit during the day and the Fisher Transform flipped back to downtrending, negating the need to make any trading decision today. I placed no trades.

10:15 a.m. New York time

The Fisher Transform on the daily chart (left) crossed over to uptrending this morning, although the indicator remains downtrending on the monthly chart (right).


My method is to let the Fisher signal when it’s time for a decision, although the decision itself is based on Elliott wave analysis. My options positions on SPY  (here and here) expire June 15, so the more sensitive daily chart signal must be taken very seriously indeed.

Having said that, the Elliott wave analysis shows impulse wave 3 at the Subminuette level remains in progress. An alternate count would interpret the chart as an ongoing 2nd wave correction at that level — perhaps a C wave. In either case, Elliott shows the direction is down.

I have labelled the count after the May 22 peak as {-4}, which is one degree below the Submicro level. Since the recent high, of $273.11, is below the wave 2 {-4} high of $273.13, both the impulse wave and corrective wave counts remain valid possibilities. Time will resolve the ambiguity.

My shares in the inverse S&P 500 fund SPXU have no expiration, and I am playing them at the Minuette level, which remains in the 3rd wave down.

The chart covers 20 days with 30-minute bars.


At this point I plan to hold on to the options positions in the expectation that the downtrend will continue. That resolve will change with a significant reversal to the upside, and most certainly if the monthly-chart Fisher Transform should move to uptrending.

By Tim Bovee, Portland, Oregon, May 31, 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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