Live: Thursday, April 30, 2020

9:45 a.m. New York time

What’s happening now? The S&P 500 rose above the 61.8% Fibonacci retracement level, which is a common turning point, and then turned and at the opening had declined 20 points below the retracement level.

What does it mean? The index, possibly has completed its upward movement and has begun a descent, perhaps to levels near 2717, the beginning of the most recent leg up.

Screen Shot 2020-04-30 at 7.16.45 AM

What does Elliott wave theory say? The internal form of the Intermediate A wave, within the Primary 2nd wave upward correction, has satisfied all requirements. The ensuing B wave’s end point will depend upon whether the Primary 2 second pattern — the second part of a complex correction — proves to be a Zigzag or a Flat. A Flat pattern would carry down to 90% or more of the length of wave A; a Zigzag would typically have less of a decline relative to A and in no case would it move beyond the start of A.

What is the alternative?  Two alternatives: Wave A is not yet complete and the rise will soon resume, or what I’ve labeled as wave is really a wave C, and what I’ve labelled as wave B is the beginning of the Primary 3rd wave down, which will reach new lows in the crash that began on February 19.

What about my trades? I’ve set stops on my three short bear call options spread positions on SPY, Lots 12, 13 and 14, all expiring May 15. They will be triggered as soon as each lot shows a minimal profit. Basically, it’s a tactic that says, Get out without a loss but don’t hang on for big profits. (The lot numbers link to the entry analyses.)

Learning and other resources. Elliott Wave International has long been the leading analytical house based on Elliott wave theory. They make available a number of free educational materials and other resources, in addition to their for-pay subscriptions.

Terminology. Here are some links to information about some of the technical jargon I use.

Charts. On my charts, waves have a subscript showing the degree above or below the Intermediate degree. Here are the subscripts and the degree each represents:

  • {+3} Supercycle
  • {+2} Cycle
  • {+1} Primary
  • No subscript: Intermediate
  • {-1} Minor
  • {-2} Minute
  • {-3} Minuette

By Tim Bovee, Portland, Oregon, April 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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