2/14 – 3:20 p.m. New York time
I entered no new positions and exited none. In my agenda discussion, below, I mentioned the 3-hour Fisher Transform on the S&P 500 had signaled a return to a downtrend. That reversed after six hours, and the daily and 3-hour Fisher Transform metrics are now in synch as uptrending, in what I consider to be a correction to the larger downtrend.
Amidst jittery markets, the economic reports serve up a wide-ranging collection of data covering prices, retail, industry and housing — tracking the economy from end to end.
The big blow-out happens on Thursday, with seven reports worth looking at.
The consumer price index will be published on Wednesday, to be followed the next day by the producer price index final demand, each at 8:30 a.m. New York time.
Retail sales will also be published on Wednesday at 8:30 a.m., and industrial production, on Thursday at 9:15 a.m.
Housing starts will top off the week, on Friday at 8:30 a.m.
CurrencyShares Euro ETF (FXE)
Update 2/13/2018: FXE reversed in what appears to be a counter-trend correction, joining the blue-chip stock indexes a few days late. I exited for a loss at $1.07 on the options position with shares at $118.84.
Shares rose by 1.1% over three days, or a +130% annual rate. The options position produced a 32.87% loss for a -3,978% annual rate.
I won’t re-enter until the dominant downtrend resumes. A move above $120.65 would mean that the downtrend was a head-fake and that the dominant trend is a continuation of the uptrend that began in December 2016.
I have entered a bear call vertical spread on FXE, using options that trade for the last time 35 days hence, on March 16. The premium is a $0.70 credit and the stock at the time of entry was priced at $117.58.
I made the decision to enter the trade in my account based on the trend as measured by the Fisher Transform and based on Elliott Wave analysis.
This position continues series that began Oct. 26, 2017
2/9 – 3 p.m. New York time
Outcomes: I entered a trend-following options position on FXE and exited two earnings plays using shares, HUN and MATX.
2/8 – 3:10 p.m. New York time
I entered no positions and exited none. I considered entering a bear call spread on one of the two fossil fuel ETFs that I track: UNG and OIH, but declined both trades without a full analysis. UNG has a very low implied volatility percentile, and OIH has bid/ask spread too wide to meet my standards.
I have entered earnings plays using shares on HUN and MATX. HUN publishes earnings on Feb. 23 before the opening bell, and MATX, on Feb. 20 after the closing bell.
Each shows an uptrend on the daily and 3-hour Fisher Transform metric.
The share prices of HUN and MATX followed those of the broad market, despite the contrarian indicators. I exited for a loss in each case on Feb. 9.
In retrospect, there was a tip-off to what occurred to be found int the beta metric, which I don’t routinely check. It showed both stocks to be super-confirming of the S&{ 500, HUN with a 2.76 beta, and MATX at 1.31. Going forward,
I shall add beta confirmation to my decision process when I’m getting contrarian signals from other metrics.
| sym | entry | exit | result | annualized | entry date | exit date |
| HUN | 32.99 | 30.57 | -7.3% | -1,339% | 2/7 | 2/9 |
| MATX | 35.87 | 34.30 | -4.3% | -799% | 2/7 | 2/9 |
By Tim Bovee, Portland, Oregon, Feb. 7, 2018
Update 2/12/2018: The markets’ broad downtrend from Jan. 26 reversed slightly to the upside in what I consider to be an upward correction within a downtrend. In Elliott wave terminology, I see the rise as being the 4th wave up within a larger A wave to the downside.
I exited the options position at $0.80 with shares at $157.94. The exit price was at 47.0% of maximum potential profit.
Shares declined by 2.0% over five days, or a -148% annual rate. The options position produced an 88.8% return for a +6,479% annual rate.
I don’t plan to trend the 4th wave upward correction. I expect the next move to be a 5th wave to the downside, and I shall attempt to trade QQQ once that wave begins.
I have entered a bear call vertical spread on QQQ, using options that trade for the last time 16 days hence, on Feb. 23. The premium is a $1.51 credit and the stock at the time of entry was priced at $161.21.
I made the decision to enter the trade in my account based on Fisher Transform signals that are downtrending at the weekly, daily and 3-hour levels of granularity.
2/7 – 3:20 p.m. New York time
In today’s outcomes, I entered an options position on QQQ and shares positions on HUN and MATX. I exited no positions.
Tim Bovee, Private Trader 
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