Live: Monday, March 5, 2018

March 5, 2018March 5, 2018 Tim Bovee

3/5 – 3:05 p.m. New York time

One trade today, exiting my bear position on FXE.

The Week Ahead: Jobs and trade

March 3, 2018March 10, 2018 Tim Bovee

Arguably, economic life is a brightly blazing unemployment rate, surrounded by a collection of economic planetoids of little significance in comparison.

Which is odd, because the employment situation report, out Friday at 8:30 a.m. New York time, is like all such reports a trailing indicator, whose aggregate numbers say much about the past but little about the future, and stand far beyond the ability of presidents or CEOs to influence. And yet, it is the jobs report that grabs the headlines and by which the successes and failures of politicians and nations are measured.

As always, the job report gets a sneak preview from the private sector, the ADP employment report on Wednesday at 8:15 a.m.

Also out on Wednesday, international trade at 8:30 a.m., providing fresh figures against which President Trump’s recent tariffs announcement can be measured.

In Fedworld:

The Federal Reserve Beige Book, which provides a narrative of economic conditions in each of the Fed’s regions, will be published on Wednesday at 2 p.m.

Fed Vice Chairman Randal Quarles speaks about foreign bank regulation at the Institute of International Bankers Washington Conference on Monday at 1:15 p.m.

Fed Gov. Lael Brainard will present an economic and monetary policy outlook at the Money Marketeers Forum in New York on Tuesday at 7 p.m.

Live: Friday, March 2, 2018

March 2, 2018March 2, 2018 Tim Bovee

2/2 – 3:15 p.m. New York time

I have entered no new positions today and exited none.

My FXE bearish position remains problematic, as noted in this morning’s post. The Fisher Transform metric shows it uptrending, and the Elliott wave count shows it in a downtrend.

Having said that, there are some ambiguities about the wave count, so as I try to puzzle out the situation, I am falling back on plain vanilla resistance.

The decline through Thursday began on Feb. 15 from a high of 120.38 on FXE. The rapid decline paused on Feb. 21.

The four-day sideways pattern had a high of 118.87. Today’s counter-trend correction to the upside showed a high of 118.65. So that very low level resistance remains intact.

My present wave count considered the present rise to be a counter-trend correction at the Subminuette degree, with the Feb. 15 high representing the the beginning of a Minuette degree 3rd wave.

A rise above 118.65 near-term resistance would decrease my confidence in the wave count but would leave it intact. A rise above the 120.38 resistance level of Feb. 15 would lead me to conclude that the wave count is incorrect and that the Subminuette 2nd wave is not complete.

As always with Elliott, time will tell.

Live: Thursday, March 1, 2018

March 1, 2018March 1, 2018 Tim Bovee

3/1 – 3:10 p.m. New York time

I entered no positions today and exited none.

I studied TLT as a potential play but have decided to wait because of ambiguities in the Elliott wave count. The chart is in a 3rd wave down at the level I trade, and I am unable to tell whether that wave is complete. The wave has been underway since mid-January, so it seems most sensible to wait for the 4th wave correction to run its course and then enter on the 5th wave down.

I also look at earnings plays. We are between earnings seasons, of course, so there aren’t many candidates. I have picked out a handful of possibilities that I shall look at on Friday with the goal of identifying some prospects.

IWM Analysis

February 28, 2018April 2, 2018 Tim Bovee11 Comments

iShares Russell 2000 ETF (IWM)

Update 4/2/2018: Big caps, small caps — whatever the size of the underlying company, shares continued the broad decline that began in late January. A Monday session added another downward dip to the charts, and I exited IWM for a $0.60 debit, or 63.2% of maximum potential profit, with shares at $148.89.

IWM’s shares declined by 2.5% over my 33-day holding period, or a -27% annual rate. The options position produced a 171.7% return for a +1,899% annual rate.

.I have entered a short vertical spread on IWM, using options that trade for the last time 51 days hence, on April 20. The premium is a $1.63 credit and the stock at the time of entry was priced at $152.65.

I made the decision to enter the trade in my account based on a Fisher Transform switch to a downtrending signal within the context of a bearish Elliott wave count.

GLD Analysis

February 28, 2018March 29, 2018 Tim Bovee13 Comments

SPDR Gold Shares (GLD)

Update 3/29/2018: GLD traced a non-trending course after I entered the position, until March 23, when it gapped to the upside and rose higher the day after, peaking just 12 cents below the Feb. 16 high.

In Elliott wave terms, that movement could be seen as the 1st wave of an uptrend, and the drop down in two subsequent days as a 2nd wave correction, allowing for a bullish interpretation that was contrary to the direction of my position.

The presumed 2nd-wave decline made the position profitable, and I cashed out at 21.7% of maximum potential profit, below my 50% target but still a reasonable gain.

The options went for a $0.72 debit with shares at $125.46. The shares movement was 0.2% over 29 days for a +2% annual rate. The options position produced a 30.6% return for a 385% annual rate.

I have entered a short vertical spread on GLD, using options that trade for the last time 51 days hence, on April 20. The premium is a $0.94 credit and the stock at the time of entry was priced at $125.24.

I made the decision to enter the trade in my account based on a bearish Elliott wave count and an ongoing downtrend signaled by the Fisher Transform metric..

FXE Analysis

February 28, 2018March 5, 2018 Tim Bovee5 Comments

CurrencyShares Euro ETF (FXE)

Update 3/5/2018: FXE rose sharply on May 1 and the day after, requiring a re-evaluation of the Elliott wave count. The Fisher Transform metric signaled an uptrend on May 2. I exited for a $0.95 debit with the underlying share price at $118.61.

Shares rose by 1.1% over five days, or a +81% annual rate. The options position produced a 33.7% loss for a -2,459% annual rate.

The magnitude of the rise made it impossible, within the Elliott wave rules, to consider the decline from Deb. 26 to still be in force as a 3rd wave to the downside at the Minuette level, which is the level I trade. It is somewhat ambiguous at this level, but I read it as an ongoing 2nd wave, a correction to the upside or sideways that, when complete, will mark the beginning of the 3rd wave.

My goal is to catch that 3rd wave down once it begins, and in the meantime to watch for clarification of the wave pattern.

I have entered a short bear call vertical spread on FXE, using options that trade for the last time 51 days hence, on April 20. The premium is a $0.63 credit and the stock at the time of entry was priced at $117.31.

I made the decision to enter the trade in my account based on a bearish Elliott wave count and a continuing of a downtrend signal from the Fisher Transform metric.