Saturday, May 7, 2016

Elliott Wave Option Signals - Short LQD and RPM

Short LQD

The investment grade corporate bond ETF (LQD) has had an extraordinary run the past several weeks.  But that run is now faltering and has triggered, and confirmed, a bearish signal on my custom indicators.  The wave count suggests a 5 wave rally is complete, and that a sharp wave ((c)) down is on its way.  I am targeting $118.60 as it is targeting the area of the previous 4th wave, and is also 23% Fibonacci retracement.  It can certainly far much further than that considering the huge run it has had the past several weeks, but trading discipline will have me stick to my strategy, which works, and the target is the $118.60 level.  Here is my trade:

Bought LQD put vertical spread June 17  117/120 at $0.94



Short RPM

RPM International Inc. has also had a nice run, almost a straight line rally as a matter of fact.  But you can see that the rally is now faltering and due for a correction.  This stock triggered a short signal which was confirmed by my custom proprietary indicators along with showing a 5 wave rally complete.  This stock should continue lower in wave ((c)) towards $48.10, and probably at least break $48.00 before I will exit.  There is no desirable spread strategy here so I'm going with a single put only.  Here is my trade:

Bought RPM put single June 17 at 50 for $1.50 (added entry price late) 


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PLEASE NOTE: THIS IS AN ELLIOTT WAVE BLOG EXPRESSING AN OPINION AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. TRADE AT YOUR OWN RISK.

2 comments:

T J33A said...

It's kind of fascinating looking back on your trades seeing what worked. Some excellent reference points for someone learning Elliott Wave. Thanks.

Todd said...

I appreciate the note, thanks!

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