SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 throughout the day traded a few points below its early morning high of 4232.50. No change in the analysis. Chart updated.

10:05 a.m. New York time

What’s happening now? The S&P 500 E-mini futures twice hit 4232.50 before the opening bell, once on Sunday again on Monday. The peaks are less than six points below the May 9 high of 4238.25

What does it mean? The new highs exceeded the June 1 high of 4230, meaning that the upward correction that began on May 13 is still underway. Under my principle analysis, that correction is occurring within a larger downtrend.

What’s the alternative? If the price moves above 4238.25, then the uptrend that began on February 23, 2020 is still underway.

[S&P 500 E-mini futures at 3:30 p.m., 80-minute bars, with volume]

What does Elliott wave theory say? The higher highs required a repositioning of waves A, B and C within the Subbitsy wave 2 upward correction.

Under my principle analysis, the present wave is wave C within Subbitsy 2 within downtrending Bitsy wave 1, the early stage of what will become a significant downtrend. The downtrend follows the end of wave 5 of Subminuette degreeon May 9.

If the price exceeds exceeds 4238.25, then wave 5 of Subminuette degree is still underway.

Learning and other resources. See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, June 7, 2021

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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All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500E-mini futures rose to within a dollar of the June 1 peak of 4230. If it rises above that level, then the upward correction that began on May 13 is still underway and Elliott wave analysis will label today’s peak as wave C within wave 2 of Subbitsy degree. and the June 1 peak will be an A wave within wave C within Subbitsy wave 2. I’ve kept this morning’s analysis as my principle, and will continue to do so until the 4230 level is beached.

9:40 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose sharply in early trading, reaching a high (so far) of 4214.75, less than 20 points below the June 1 high of 4230.

What does it mean? My principle analysis places that June 1 high as the end of an upward correction within a downtrend that began May 13, and as long as the price remains below 4230, that analysis stands.

What are the alternatives? 1) A rise above the June 1 high would mean that the correction is still underway. 2) A price above the May 9 high, the peak of a larger rise that began last year, would mean that the correction was within an ongoing uptrend rather than a downtrend.

[S&P 500 E-mini futures at 3:30 p.m., 80-minute bars, with volume]

What does Elliott wave theory say? Wave 5 of Subminuette degree and of higher degrees peaked on May 9, ending a long-running uptrend. The subsequent decline is the first wave of a new downtrend, which is still in its first baby steps, wave 1 of Bitsy degree. Within that 1st wave, wave 2 of Subbitsy degree ended on June 1, and the chart is now in the early stages of Subbitsy wave 3.

In the first alternative analysis, a rise above the end of Subbitsy wave 2 would mean that the 2nd wave correction is still underway. In the second analysis, a rise above the end of wave 5 of Subminuette degree would mean that the long-running uptrend is still underway.

Learning and other resources. See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, June 4, 2021

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.

License
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All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 recovered much of its overnight decline, reaching 4202.50 on the futures. The price remained below the overnight high. I have no change to the analysis and have updated the chart.

9:35 a.m. New York time

What’s happening now? The S&P 500 E-mini futures declined sharply in overnight trading, down to a low of 4169.50 before the opening bell.

What does it mean? The further the decline, the greater the confirmation of yesterday’s principle analysis: The June 1 peak of 4230 marked the end of the upward correction that began on May 13 from 4029.25, and the downtrend that began on May 9 from 4238.25 has resumed.

What’s the alternative? It is possible that the correction is still underway. Given the overnight decline, I consider this to be the less likely analysis. A rise above the June 1 high of 4230 would confirm this alternate analysis.

[S&P 500 E-mini futures at 3:30 p.m., 75-minute bars, with volume]

What does Elliott wave theory say? Under my principle analysis, wave 2 of Subbitsy degree ended on June 1 and Subbitsy wave 3 began. Third waves tend to have a lot energy — the sort of thing that makes market analysts perk up and start talking about the end of a bull market — and this wave 3 will carry the price below 4029.25, the end of the preceding 1st wave, perhaps significantly below.

This is all happening within wave 1 of Bitsy degree, a small step in the large-degree downtrend that began on May 9. The May 9 peak was the end of wave 5 of Minute degree, which began on October 30, 2020 from 3225. The Minute degree is eight degrees larger than Subbitsy degree, so it’s a big deal. Under this analysis I expect the price to work its way down to the 3200s and below. But never in a straight line. The market always is fractal in its nature, showing trends and corrections within larger trends and corrections, from the largest to the smallest moves.

Under the alternative analysis, the Subbitsy wave 2 correction is still underway, and the price can be expected to reverse, returning to the 4200s as the correction continues on its course. However, there is a limit: If the price moves above the start of the preceding 1st wave, 4238.25, then the entire analysis is tossed out as invalid, and the large-degree uptrend that has been going on for more than a year is still underway.

Learning and other resources. See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, June 2, 2021

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.

License
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All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 dropped back to the narrow range that has defined its course since Monday afternoon. No change to the analysis. I’ve updated the chart.

9:40 a.m. New York time

What’s happening now? The S&P 500 E-mini futures traded sideways overnight and then. shortly before the opening bell, rose slightly, remaining below yesterday’s high of 4230.

What does it mean? Under my principle analysis, yesterday’s high marked the end of the upward correction that began on May 13, and the beginning of a resumption of the dominant downtrend, which will carry the price down into the low 4000s and below.

What are the alternatives? 1) If the price rises above 4230 then the correction is still underway. 2) If it rises above the May 9 high of 4238.25, then the dominant trend is still up and will carry the price to a series of new highs.

[S&P 500 E-mini futures at 3:30 p.m., 70-minute bars, with volume]

What does Elliott wave theory say? Under my principle analysis, the decline from yesterday’s high is wave 1 within wave 3 of Subitsy degree, which in turn is the middle wave within wave 1 of Bitsy degree. Bitsy wave 1 began on May 9.

Under the first alternative, the Subbitsy wave 2 correction to the upside is still underway, and the present wave is C within Subbitsy 2.

Under the second alternative, wave 5 of Subminuette degree — five degrees above Subbitsy — is still underway. I consider this alternative to be unlikely.

Learning and other resources. See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, June 2, 2021

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.

License
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All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

SPCE Trade

Virgin Galactic Holdings Inc. (SPCE)

Lot 1

I have entered a short bear call spread on SPYCE, using options that trade for the last time 45 days hence, on July 16. The premium is a $0.70 credit per contract share and the stock at the time of entry was priced at $28.29.

The implied volatility rank (IVR) stands at 46%.

Premium:$0.70Expire OTM 
SPCE-bear call spreadStrikeOddsDelta
Puts   
Long41.0085.0%29
Break-even35.3081.5%34
Short36.0078.0%38

The premium is 28% of the width of the position’s wing.


The profit zone covers a 24.8% move to the upside with no limit to the downside.

The risk/reward ratio is 6.1:1, with maximum risk of $430 and maximum reward of $70 per contract.

[SPCE at 9:37 a.m., hourly bars]

Elliott wave analysis. By my count the peak of May 28 completes a 5th wave to the upside. (The subscripts in curly brackets after the wave numbers are relative to each other and don’t refer to the named Elliott wave degrees.) What follows is either a new downtrend or a correction within an ongoing uptrend. For my principle analysis I’ve treated the decline as a correction, counting the peak as a 5th wave within a larger 3rd wave, and the ensuing decline as an A wave within larger 4th wave.

In either case, the peak of 35.04 should stand unchallenged until the 4th wave has reached completion, allowing me to place my short strike price at 36, slightly above the peak. The price at entry is significantly below that level, creating a higher risk/reward ratio than I like, but with active management of the position I presume that I’ll be able to mitigate the risk.

By Tim Bovee, Portland, Oregon, June 1, 2021

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.

License
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All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. Having peaked in early trading, at 4230 on the futures and 4234.12 on the index, the S&P 500 fell through most of the day, reaching below 4200.

The decline so far is sufficient to create ambiguity in the Elliott wave analysis. As I’ve marked the chart, the decline is a corrective wave within uptrending wave C within uptrending wave 2 of Subbitsy degree. It would be just as reasonable to label this morning’s peak as the end of Subbitsy wave 2 and the start of Subbitsy 3 to the downside.

The morning peak is very close to the May 9 high of 4238.25, and as noted in this morning’s discussion, any move above that level changes the analysis of everything that has occurred since May 9. The count prior to the May 9 high suggests that level was the end of the uptrend, and if that is correct, there is very little room for a further rise.

9:40 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose sharply in overnight trading, reaching a high of 4230 shortly after the opening bell.

What does it mean? The rise is the final leg of a corrective pattern that began on May 27 from 4177.75. Once the pattern is complete, the price will begin a significant decline, in its initial phases reaching below the May 13 low of 4029.25.

What’s the alternative? The price is only a few points below the May 9 peak of 4238.25, which my principle analysis has as the starting point of a downtrend of high degree. If the price moves above that level, then the decline has been a correction in an ongoing uptrend.

[Close-up: S&P 500 E-mini futures at 3:30 p.m., 55-minute bars, with volume]
[Big picture: S&P 500 index at 9:35 a.m., 2-day bars]

What does Elliott wave theory say? The May 9 peak of 4238.04 on the S&P 500 index ended a wave 3 rise of Minor degree that began on February 23, 2020 from 2191.86, the low point of the early pandemic crash. In my principle analysis I’ve labeled the ensuing decline as wave 1 of Bitsy degree, the first tiny step in a decline that will eventually move into the 2000s or lower, a 4th wave in an expanding Diagonal Triangle that began on December 26, 2018. The “expanding” part means that the price channel boundaries of the structure move further apart from each other, day by day.

Within Bitsy wave 1, Subbitsy wave 1 completed its fall on May 13, and Subbitsy wave 2 is underway. This 2nd wave has taken a compound form, in which two corrective patterns are connected by an X wave. The present corrective pattern, a Flat, began on May 27.

There is an unusual aspect of this correction within the downtrend. Second waves normally are simple Zigzag patterns; most of the compound corrections I’ve seen are in the 4th wave. Looking forward, the present wave C within Subbitsy wave 2 isn’t necessarily the end of the compound structure. I’ve occasionally — rarely — seen compounds go to a third corrective pattern.

But assuming two patterns within the compound correction, then the next move will be wave 3 of Bitsy degree, which will decline with the energy typical of 3rd waves, presenting the market with an OMG! moment.

The alternative analysis would kick in if the price rises above the May 9 peak, of 4238.25 on the futures. A rise above that price would mean that the subsequent decline was a 4th wave correction within the ongoing Minor wave 3 uptrend that began in February 2020. Such an outcome would force a redrawing of the upper price channel boundary and create an expectation of significant upside potential.

Learning and other resources. See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, June 1, 2021

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.

License
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

SP500 Analysis

10:50 a.m. New York time

What’s happening now? The S&P 500 E-mini futures continued to work their way lower in overnight trading.

What does it mean? The decline is the second wave within a second corrective pattern in an uptrend compound correction that began on May 13. The second pattern appears to be taking a shallow form.

What’s the alternative? It’s still, barely, possible to interpret the decline as the start of a significant movement in the downward direction of the main trend. See the Elliott wave theory section for more. It’s also possible, although unlikely, to interpret the entire decline from May 9 as a correction within an ongoing uptrend.

[S&P 500 E-mini futures at 10:47 a.m., hourly bars, with volume]

What does Elliott wave theory say? By my principle analysis, the high on May 27 of 4217.50 was the end of the A wave within the second pattern of a compound wave 2 correction at the Subbitsy degree. The internal structure of wave A lends credence to this interpretation as opposed to the first alternative analysis. It is composed of three waves, which is the pattern we see in Flat corrections. Had there been five waves, then the structure have greater ambiguity, since five waves can be a Zigzag pattern within a correction, or a 1st wave within a main trend. With three waves, Subbitsy wave 2 must still be underway.

The second alternative analysis — a correction beginning May 9 within an ongoing wave 5 — continues to be a possibility. The internal counts prior to the May 9 peak have persuaded me that May 9 really did mark the end of the uptrend, but that’s not 100%

Holiday hours. The futures market in the U.S. will close at noon today and reopen at 5 p.m. The stock markets will remain closed, limiting the input that futures traders rely on in part. I plan no further update today unless there is a significant price move.

Learning and other resources. See the menu page Analytical Methods for a rundown on where to go for information on Elliott wave analysis.

By Tim Bovee, Portland, Oregon, May 31, 2021

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.

License
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. Perhaps it is in anticipation of Monday’s Memorial Day holiday in the United States, but the S&P 500 has done very little today, trading within a narrow range that is the stock-chart definition of boring. I’ve updated the chart below.

The U.S. markets are closed on Monday, but futures will trade on a truncated schedule. I’ll post an analysis of the S&P 500 E-mini futures Monday morning, and shall skip the afternoon update unless there’s a significant move.

9:40 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose higher in overnight trading, to 4217.40, and then stayed within a very narrow range.

What does it mean? The upward correction that began on May 13 from 4029.25 is still underway.

What’s the alternative? Unchanged from yesterday: If the price moves above 4238.25, the high of May 9, then the uptrend that began last year is still underway and higher prices lie ahead. If the price reverses and drops below 4029.25, the low of May 13, then the energetic middle portion of the downtrend that began May 9 is underway.

[S&P 500 E-mini futures at 3:30 p.m., hourly bars, with volume]

What does Elliott wave theory say? Under my principle analysis, the price is presently in wave A of the second portion of a compound correct, wave 2 of Subbitsy degree within downtrending wave 1 of Bitsy degree.

Read More »

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 worked its way downward by a little from the early afternoon high of 4210 on the futures, 4213.38 on the index. The rise is part of wave A wave within wave 2 of Subbitsy degree. After the A wave comes a downward B wave and then an upward C wave, completing the second pattern in the compound correction. Chart updated.

9:55 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose sharply at the opening bell, to a high so far of 4209.25.

What does it mean? The pattern to me looks like the second alternative scenario I outlined in yesterday’s post: A declining separator in a compound correction, following the end of one corrective pattern and the preceding that start of another. The rise is the start of the next corrective pattern.

What’s the alternative? If the price moves above 4238.25, the high of May 9, then the analysis switches to the third alternative: The uptrend that began last year is still underway and higher prices lie ahead. If the price reverses and drops below 4029.25, the low of May 13, then the principle analysis from yesterday holds sway; the energetic middle portion of the downtrend that began May 9 is underway.

[S&P 500 E-mini futures at 3:30 p.m., hourly bars, with volume]

What does Elliott wave theory say? Under the principle analysis, the decline that began May 25 from 4212.25 is wave X, a separator wave within uptrending wave 2 of Subbitsy degree. Wave X is complete and is followed by wave A of a second pattern within a compound correction. The corretive pattern can be a Zigzag, a Flat or a Triangle.

Read More »

SP500 Analysis

3:30 p.m. New York time

Half an hour before the closing bell. The S&P 500 fell during the day and then rose a bit, to 4199 on the futures. The price then dropped back by a few points. No change to my analysis from this morning. I’ve updated the chart.

9:55 a.m. New York time

What’s happening now? The S&P 500 E-mini futures rose slightly in overnight trading and then curled over in what appears to be a resumption of the decline that began yesterday from 4212.75.

What does it mean? Although it’s impossible to be certain this early in the game, the decline appears to be the early steps in the resumption of the downtrend that began on May 9. It eventually will reach below 4029.25, the start of an upward correction that ended yesterday.

What’s the alternative? It’s a period of vast uncertainty in the markets.

1) Possibly, the decline is a small downward correction within the larger upward correction that began on May 9. If that’s the case, then the price will reverse and reach above 4212.75.

2) Or, it could be that the decline is a separator in a compound correction, following the end of one corrective pattern and the preceding that start of another. In which case, we’ll see more bouncing around within a relatively narrow range.

3) And if the price reverses and rises above the start of the larger downtrend that began on May 9 from 4238.25, then the uptrend that began last year is still underway and higher prices lie ahead.

[S&P 500 E-mini futures at 3:30 p.m., hourly bars, with volume]

What does Elliott wave theory say? So, here’s the lineup as succinctly as I can put it.

Principle: Wave 3 of Subbitsy degree within wave 1 of Bitsy degree began on May 25 and will see a signifiant decline.

Alt 1: Wave 2 of Subbitsy degree within wave 1 of Bitsy degree is still underway and will see a further rise.

Alt 2: Wave X within wave 2 of Subbitsy degree is underway and will be followed by another corrective pattern.

Alt 3: Wave C of indeterminate degree within uptrending wave 5 of Subminuette degree is underway and will be followed by a rise above the May 9 high of 4238.25, continuing the uptrend that began last year after the crash early in the pandemic.

Read More »