Live: Tuesday, July 31, 2018

11:15 a.m. New York time

Since my very-short-term chart last week, Elliott wave analysis shows that SPY has completed wave 2 to upside of the Minute degree {+1} and is working its way through the early portion of a 3rd wave down at the same level.

It is at this microscopic level that the important waves are happening, for they determine in detail when I should add a bear positions to my options holdings in SPY.

The chart covers from July 25 to the present using 5-minute bars.


The count shows completion of a 1st wave to the downside at the Micro degree {-2}. A 2nd wave correction at that degree has begun, working its way through a A wave of the Submicro degree {-3} which is in a 4th wave correction at the Minuscule degree {-4}.

The next steps, once the Minuscule 4th wave is complete, will be for a 5th wave push to the upside that will complete the Submicro A wave, ushering in a B wave to the downside.

Is that the signal to enter a new SPY position? I think not. A typical 2nd wave is a zig-zag, and the C wave can be expected normally to retrace a significant amount of the preceding impulse wave, the 1st wave.

For my account, I judge the proper moment of entry to be around the end of the C wave of Submicro degree, which will in a typical zig-zag, also end the 2nd wave of Micro degree. The ensuing 3rd wave can be expected to carry well below the July 30 low, giving a position a roaring start toward profit.

By Tim Bovee, Portland, Oregon, July 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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