Live: Monday, March 30, 2020

11:15 a.m. New York time

The Elliott wave analysis of the S&P futures chart remains ambiguous, as the price declined by 7% from its high of March 26, and then rose again.

I’ve tentatively labeled the movement as the beginning of wave 5 to the downside at the Intermediate level. If the price declines below the beginning of wave 4, at 2174, then that interpretation will be confirmed. If the price rises above the tentative end of wave 4, at 2634.50, then the movement is most likely a combination, a pattern in Elliott that consists of several of the simpler three-wave corrective moves, and wave 4 has not ended.

Time will tell. In any case, my bear call options spreads on SPY are already well positioned whichever way it goes.¬† If the movement turns out to be a 5th wave, then my positions will return to current profitability. If it’s a combination, then my positions are unlikely to add to the loss, and since the the strike price is out-of-the money (the good spot for short options), they’ll benefit a little from time decay.

In either case, the options don’t expire until May 15, giving them 46 days of life for the downtrend to continue. I anticipate no trades today.

By Tim Bovee, Portland, Oregon, March 30, 2020


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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