Live: Tuesday, Sept. 11, 2018

10:25 a.m. New York time

SPY, 15 days, 20-minute bars

I’ve revisited my Elliott wave analysis of SPY, the fund that tracks the S&P 500. The poorly differentiated nature of the waves within the decline  beginning Aug. 29 had left me scratching my head in puzzlement.

The answer, I believe, is to count the decline as an extended wave, which is said to occur within most impulse waves. I’ve rarely seen an extended 1st wave, and that threw me of. The leading Elliottician of our age, Robert Prechter, says that extensions occur most often in 3rd waves, and I’ve often seen them in the 5th.

Extensions occur in impulse waves — the main trend — rather than in countertrend corrections. That strengthens the case for the present decline being a 1st wave of Minor degree {+2} rather than an X wave continuation.

SPY is now in a 2nd wave correction in the Minuette degree, and when that is complete, should begin a 3rd wave that will provide a significant decline.

AAPL is slightly below the profit zone of my position, and AMD is in the zone. Both positions are based on working the odds implied by the implied volatility.

Once my new TastyWorks brokerage account is funded, I’ll be using it for odds plays, reserving my present TD Ameritrade account for Elliott wave plays. TD Ameritrade’s ThinkOrSwim platform has excellent charting and analytical features which TastyWorks does not yet have. Both platforms were developed Tom Sosnoff, a veteran options trader who has averred on occasion that he is no fan of charts and traditional technical analysis. So perhaps those features will be forever absent from TastyWorks.

By Tim Bovee, Portland, Oregon, Sept. 11, 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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