Live: Monday, March 16, 2020

11 a.m. New York time

I’ve posted the analysis of my newly entered short bear call spread on SPY.

10:30 a.m. New York time

By my Elliott wave analysis of the chart, the S&P 500 has begun its 3rd wave of a downtrend that began March 3. The corrective 2nd wave that ended today ended near a Fibonacci level of 38%. (See the Private Trader Live post of Saturday.) Under this scenario, the 3rd wave is likely to be longer than the 1st wave, which ended Friday, because the 3rd wave is never shorter than both the 1st and the 5th. Generally, the 3rd is the longest.

The 1st wave was 631.27 on the S&P 500, so the 3rd wave under the Elliott wave rules will have a minimum downside target of 1769.90 on the S&P 500, and most like significantly lower than that. If the index fails to hit that target, then the 5th wave must be long more than 631.27 long.

(See my brief explanation of Elliott wave analysisposted February 29.)

I have entered a new short bear call spread position on SPY, the exchange-traded fund that tracks the S&P 500. I shall post the analysis shortly.

I also bought more shares of SDS, the inverse and double exchange-traded fund that moves the opposite of SPY, and at double the distance. The entry debit was $37.72 per share.

By Tim Bovee, Portland, Oregon, March 16, 2020

Disclaimer

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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