Live: Thursday, June 7, 2018

3:15 p.m. New York time

No trades today.

I have an error on the chart below. The listings in the box of wave labels in the upper right-hand corner were incorrect.

In looking at the chart, if the start of wave 1 in the Minor degree is exceeded, then the next count will be to consider wave 2 {+3} to still be underway, with the 1 {+3} labeled replaced by an A {+2} and the subsequent move forming a zig-zag to the upside. Maybe. We shall see, and maybe a recount won’t be needed.

10:55 a.m. New York time

This morning’s lede is identical to yesterday’s: “SPY opened a bit higher this morning compared to the prior day’s range, and then began declining. At this point there has been no change in the  Elliott wave analysis or the Fisher Transform signals.”

My two options positions (here and here) expire in eight days. Typically in such cases I will roll out, taking the loss if needed, on Friday or Monday. I shall decide which on Friday.

This morning I stepped back to look at the big picture. Normally I’m more short-term oriented in my trading, but the longer term has become relevant, as the chart below shows.

The reason is wave 2 {+3} that has been underway since April 2. The textbook of the discipline, The Elliott Wave Principle by Robert Prechter and A.J. Frost, contains this rule: “Wave 2 never moves beyond the start of wave 1”. If a chart shows that happening, then the wave count on the chart has been shown, by the unfolding of events, to be incorrect.

That’s a long away of saying that Elliott wave analysis has a lot of ambiguity. I find it to be useful, and also very, very frustrating.

The chart shows wave 1 of the Minor degree ({+3}) beginning at $280.41 on March 13. The price presently stands at $277.32 , a retracement exceeding the 78.6% Fibonacci level.  That means that the present count can allow only an additional rise of $3.09 before the price must reverse into a B wave to the downside in the Minor degree ({+2}). If that fails to occur, then it’s time for a recount.

The chart covers nine months with daily bars.


By Tim Bovee, Portland, Oregon, June 7, 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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