4/6 – 3:15 p.m. New York time

The S&P 500 has continued to decline, benefiting my bear positions on exchange-traded fund that tracks the index, SPY (analyses here and here). The percentage of maximum profit on each position stands below 25%; my goal is to exit at 50% or higher.

No exits today, and I have no new positions in sight. Look for The Week Ahead to be posted on Saturday.

4/6 – 10:40 a.m. New York time

My Elliott wave count of the S&P 500 is unchanged from yesterday. I plan no exits from existing positions at this point, nor do I plan to enter any new positions.

I took a look at FXE, which tracks the EUR/USD exchange rate, but have decided not to pursue a trade at this point.

By Tim Bovee, Portland, Oregon, April 6, 2018

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4/5 – 3:25 p.m. New York time

I entered no new positions and exited none.

4/5 – 11:10 a.m. New York time

I’m continuing to focus on the broad indexes, using Elliott wave analysis. By my count, SPY attained a major peak on Jan. 26 and has reversed  in an impulse wave to the downside. That is, it has been a bear market since that day.

Early on in such reversals it is difficult to know exactly at what level each wave stands. By my count we are in a 3rd wave down at the Minuette level, beginning March 13, and within that wave, a 2nd wave up at the Sub-Minuette level.

The lower-level up wave is contrary to my bear positions. They options used to construct them expire in mid-May, and so I shall wait and see how the lower-level wave develops.

My goal generally is to trade the Minuette level, but it’s a guideline, not a rule.

I have no new positions in sight at this point. I plan to take at FXE, which tracks the EUR/USD currency exchange, to see if it is of interest.

By Tim Bovee, Portland, Oregon, April 5, 2018

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4/4 – 3:15 p.m. New York time

I entered no new positions today and exited none.

4/4 – 11:25 a.m. New York time

The S&P 500 remains in a 3rd wave down by my count using Elliott wave analysis. This mornings price decline brought one of my bearish vertical spreads on SPY to 27% of maximum potential profit, and the other to 10%. My goal is 50% or better, so I am taking no action this morning.

I have no prospective new positions today.

By Tim Bovee, Portland, Oregon, April 4, 2018

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SPDR S&P 500 ETF (SPY)

Update 4/30/2018: I exited SPY as it continued an uptrending counter-trend correction. The decision was based on Elliott wave analysis and the timing on the Fisher Transform metric.

By my count SPY continued to trace out a 4th wave to the upside at the Minuette degree. It has completed requirements for an A-wave to the upside at the Sub-minuette degree, but without guarantees that the A-wave is indeed complete.

With 18 days left until expiration of the position, I chose to roll out now, for a $4.71 debit with shares at $265.83,  and shall re-enter a bear position at an appropriate moment with a later expiration. 

Shares rose by 2.6% over 27 days, or a +36% annual rate. The options position produced a -12.3% loss for a -166% annual rate.

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I have entered a short vertical bear spread on SPY, using options that trade for the last time 45 days hence, on May 18. The premium is a $4.13 credit and the stock at the time of entry was priced at $259.00.

I made the decision to enter the trade based on the Elliott wave count. I see SPY as being in a 3rd wave down within a 3rd wave down at the Minuette level, which is what I normally trade, within a 1st wave down at still higher levels.

The present wave down, which began on March 13, has yet to move below the Minuette 1st wave endpoint of $252.92 on Feb. 9. A decline below that level, which I’m betting on with this trade, will confirm that the 3rd wave is underway. A move back to the upside would suggest that the 2nd wave in the upward correction is not yet complete and doing something other than a simple zig-zag. Since 2nd waves almost always tend to be simple zig-zag patterns, I would be surprised to see something more complex happen. 

Time will tell, of course, and if I am proven incorrect in my judgement, my analysis will tell me when to get out in order to mitigate my losses.

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4/3 – 3:30 p.m. New York time

I added a bear position on SPY, essentially rolling my prior IWM position, which tracks the Russell 2000, into the more narrow market index tracking the S&P 500

4/3 – 2:10 p.m. New York time

I have added a new position on SPY to my account, a bear play. The analysis includes a discussion of my decision to take the trade based on SPY’s Elliott wave count.

4/3 – 1:40 p.m. New York time

Having looked over the possibilities for new trades, I think my best bet will be to add another position on SPY to my portfolio.

At this point in our new bear market, I’m relying heavily on Elliott wave analysis. The S&P 500, which SPY tracks, is one of the easiest symbols to analyze, in part because the quirks of individual companies are smoothed out by its breadth, and in part because the extremely high volume of trading makes it a good reflection of the public sentiment.

Tolstoy wrote in his masterwork Anna Karenina, “Happy families are all alike; every unhappy family is unhappy in its own way.”

But markets differ from families.

Bull markets, climbing a wall of worry, tend to show a great deal of individuality in the way stocks rise, depending upon the state of each company and its competitors.

Bear markets are all alike. They cascade their way down a cliff into the pit of panic, as all traders increasingly are convinced that the good times are gone — for good.

Trade and analysis to come shortly.

4/3 – 11:10 a.m. New York time

The downward rush in the broad markets has paused this morning, so will be monitoring my one remaining position, SPY, until it drops some more. It presently stands at 18.5% of maximum potential profit, and my goal is 50% or better.

My other task today will be to see what I can add to my account. That will depend on an Elliott wave analysis of the charts.

By Tim Bovee, Portland, Oregon, April 3, 2018

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4/2 – 3:45 p.m. New York time

I exited two positions today,  DVN and IWM, and entered none.

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Jobs week has rolled around again, with the employment situation report out Friday at 8:30 a.m. New York time and the private-sector sneak preview of the jobs sitch, the ADP employment report, on Wednesday at 8:15 a.m.

International trade stats will be published on Thursday at 8:30 a.m.

Adding spice to the week: Fed Chairman Jerome Powell addresses the Economic Club of Chicago on Friday at 1:30 p.m. His topic will be the economic outlook, an oldy but goody for Fed officials.

Another of the central bank’s glitterati, Fed Gov. Lael Brainard, will discuss financial stability at New York University’s Stern School of Business on Tuesday at 4:30 p.m.

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Today culminates a short week with a short day. U.S. markets will be closed on Friday for a Christian holiday, and they will end the regular trading session today at 2 p.m. New York time, two hours early.

I have exited GLD for a profit, although below my 50% target. The chart has grown less bearish and I took the opportunity to take my gains off the table. I shall update the analysis with results later this morning.

I have no other exits in sight, and plan no new positions today. So this post will wrap up my trading for the week.

Look for The Week Ahead sometime Saturday.

By Tim Bovee, Portland, Oregon, March 29, 2018

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SPDR S&P 500 ETF (SPY)

Update 4/30/2018: I exited SPY as it continued an uptrending counter-trend correction. The decision was based on Elliott wave analysis and the timing on the Fisher Transform metric.

By my count SPY continued to trace out a 4th wave to the upside at the Minuette degree. It has completed requirements for an A-wave to the upside at the Sub-minuette degree, but without guarantees that the A-wave is indeed complete.

With 18 days left until expiration of the position, I chose to exit for a $5.70 debit with shares at $265.75 and shall re-enter a bear position at an appropriate moment with a later expiration.

Shares rose by 1.9% over 33 days, or a +22% annual rate. The options position produced a -24.0% loss for a -265% annual rate.

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I have entered a short vertical spread on SPY, using options that trade for the last time 51 days hence, on May 18. The premium is a $4.33 credit and the stock at the time of entry was priced at $260.57.

I made the decision to enter the trade in my account based on Elliott wave analysis. At the level I trade, the Minuette, I count SPY as tracing a 3rd wave down within a higher 1st wave down, and one level down within the Minuette, a 3rd wave down.

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3/28 – 3:05 p.m. New York time

I entered a new position on SPY and exited no positions.

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