2:10 p.m. New York time

I entered a bear call spread position on SPY.

11:55 a.m. New York time

This morning’s SPY chart, covering five days with 5-minute bars.

 

I’ve moved the degrees up a bit, making the Aug. 15 low the end of the 1st wave of Minuette degree. For this chart I’ve counted the Aug. 20 high as the end of the 2nd wave of Minuette degree. It could also be seen as the end of the A wave of the Subminuette.

In either case, the next wave is down, and I plan to re-enter SPY today or tomorrow, with a bear position.

By Tim Bovee, Portland, Oregon, Aug. 20, 2018

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Economically significant? Sometimes. Often of interest? Sure. Who doesn’t take notice when the powerful gather to celebrate their power. And to exchange ideas. And maybe, to learn. Or to mislearn.

The Federal Reserve Bank of Kansas City, as it has since 1978, hosts the annual Economic Policy Symposium, and as has been the case since 1982, the location will be Jackson Hole, Wyoming, which has better mountains than the bank’s home base.

The symposium’s theme this year: “Changing Market Structure and Implications for Monetary Policy”. In a time when the Fed continues to tighten the Fed Funds rate, and seven months after the S&P 500 hit a peak that has not been equalled since, it’s a topic that ought to make the heart of every trader’s heart beat just a little bit faster.

The full agenda can be found here. The most closely watched speech will likely be that of Fed Chairman Jerome Powell, who takes to the podium on Friday at 10 a.m. New York time to discuss monetary policy.

There are also major economic reports to be followed during the week: Durable goods orders — how confident are buyers that it’s a good time to take-on significant capital purchases — on Friday at 8:30 a.m., and two real-estate reports, existing home sales on Wednesday at 10:30 a.m., and new home sales on Thursday at 10 a.m.

The Fed outside of Jackson Hole will also get a moment in the sun with the release on Wednesday at 2 p.m. of Federal Open Market Committee minutes from the July 31-Aug. 1 meeting, at which members voted to raise the Fed Funds rate by 25 basis points.

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3:10 p.m. New York time

SPY is continuing to work its way up, and I shall wait until next week at the earliest before re-establishing a bear position.

11:25 a.m. New York time

SPY reached at peak at the very small degree I’ve been tracking, the Tiny degree {-5). See my discussion yesterday and my chart talk the day before.

This chart of SPY is a 20-day chart with hourly bars. It clearly shows three waves to the upside, ending in a 4th wave downward correction at the Tiny degree, and I now anticipate a 5th wave to the upside, completing the Minuscule {-4} degree rise.

Bottom line: I should consider re-establishing my position either today or Monday. I’ll be keeping an eye on it and make a decision later today.

By Tim Bovee, Portland, Oregon, Aug. 17, 2018

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11:55 a.m. New York time

My chart analysis of SPY, posted yesterday, proved to be accurate. SPY has reversed to the upside in the 2nd wave of the Minuscule degree {-4}. I anticipate no trades today as I wait for that 2nd wave to work its way through.

By Tim Bovee, Portland, Oregon, Aug. 16, 2018

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10:20 a.m. New York time

Having exited my former SPY position on Tuesday, the next task is to figure out when to re-establish a position with a later expiration date.

This early in the decline from the Aug. 7 peak, I’m somewhat arbitrarily declaring the degree of my count to be one so low that it doesn’t have an “official” name. I’ve elected to call it the Tiny degree {-5}, one degree smaller than the officially named Minuscule degree {-4}. As the pattern develops, I may decide to change that degree to a higher one. Or not. There’s no way to tell yet.

The SPY chart covers 15 days using 5-minute bars.

By my count we are in the 5th wave down of the tiny within the 1st wave of the Minuscule degree. I’m waiting for that 5th wave to end, and intend to enter a new position on SPY during the 2nd wave Minuscule, an uptrending counter-trend correction.

We’re not there yet. I don’t anticipate trades today. Waiting is.

By Tim Bovee, Portland, Oregon, Aug. 15, 2018

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3 p.m. New York time

I have updated the SPY analysis with results and a chart talk decontructing how the position fared.

1:35 p.m. New York time

I have exited my position in SPY for a loss and shall update the initial analysis with results.

11:40 a.m. New York time

SPY this morning, as yesterday, is trading within the prior day’s range. The position expires Friday, and I shall roll out of it today and pick my re-entry point for the next bear play. This position will produce a loss..

By Tim Bovee, Portland, Oregon, Aug. 14, 2018

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9:50 a.m. New York time

SPY this morning is trading within the prior day’s range. In Elliott wave terms, at a very low degree the downward wave that began Friday is in a 4th wave counter-trend correction. (See Friday’s chart.) These are very small movements that have little significance to most human traders; the downward movement has only just begun and has much distance to travel before it reaches its end.

I anticipate no trades today.

By Tim Bovee, Portland, Oregon, Aug. 13, 2018

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Productivity, 1988-2017

The always important question of productivity takes center stage this week, along with the retail, housing and industrial sectors.

The quarterly productivity and costs report will be published Wednesday at 8:30 a.m. New York time. As the chart above shows, productivity peaked in 2002, hit a lower high in 2011, and thereafter fell into a narrow range in the cellar. Economists consider productivity to be the source of growth.

The chart of productivity below shows just how dramatic the long-term change has been. We are back in the 1970s, and traders of a certain age know all too well what that meant back in the day: Massive job losses, the dismantling of the American industrial sector, stagflation. Not a happy chart.

So economists for sure and many traders as well will be paying attention when the report is released.

The sector reports will be concentrated on Wednesday and Thursay.

Expect retail sales on Wednesday at 8:30 a.m., concurrently with productivity, and industrial production 45 minutes later at 9:15 a.m. Housing starts will be published on Thursday at 8:30 a.m.

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10:30 a.m. New York time

SPY has peaked and this morning began its next Elliott wave down. I count it as a B wave with an ongoing correction. It could rather be a 3rd wave down. As the movement progresses I’ll adjust my count as needed.

The SPY chart covers 10 days using 5-minute bars.

My position on SPY expires at the end of next week. My intent is to hold on until perhaps as late as Wednesday, and then exit. On Monday, when I have more verification that this is indeed the beginning of the downward wave, then I shall consider when I should entered the next position with a later expiration.

By Tim Bovee, Portland, Oregon, Aug. 10, 2018

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9:40 a.m. New York time

SPY has for a third day begun trading in a very narrow range. A traditional chartist would look at SPY, nod sagely, and mutter, “Topping behavior.”

The position expires Aug. 17. I’m going to give it a bit more time in the hope that the topping will turn into a price collapse and return my position to profitability.

The SPY chart covers one month with daily bars. The subchart is the Fisher Transform Trend, which produces a binary true (high) or false signal on Fisher crosses.

By Tim Bovee, Portland, Oregon, Aug. 9, 2018

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