Elliott Wave Option Signals - Short NVDA

NVIDIA (NVDA) is in the middle of a major bull run that should last several months if not years.  However, the shorter term picture shows an Intermediate degree wave (1) ending, and a wave (2) in the works.  More importantly, and more desirable, is that a Minor wave C down is about to get underway.  C waves are third waves and so they are impulsive and very strong.  I expect this stock fall around the 50% Fibonacci retracement level at $41.47 before looking for any meaningful bottom.  Here is my short trade:

Buy to open NVDA Aug  40/47 put spread for $2.09

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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.

Elliott Wave Option Signals - Short NSP

Insperity Inc. (NSP) has been on a huge monster rally the past several weeks but it has become quite choppy and is starting to roll over to the downside.  Today's sharp pop is just an exhaustion rally with the tired and tapped out bulls throwing everything they have at it today for one final push.  The next move of consequence should be to the downside.  I show a large Intermediate "flat correction" unfolding with today's rally part of wave (B) which should soon give way to a strong impulsive decline for wave (C) towards Fibonacci support at the $66.72 level (38% Fibo), which is also near the previous Minor wave 4, another typical draw for larger degree corrections.  So I went short with a put spread.  Here is the trade:

Buy to open NSP Aug 19  70/80 put spread at $4.13

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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.

Elliott Wave S&P Futures and VIX Analysis

The 30min chart of the VIX has been triggering a buy signal for most of the week as you can see from the green paint bars in the chart.  However, the official buy signal was not triggered until today when price closed above the signal line.  This is a short signal for the S&P.  Since it's a 30min chart, it usually means at least a 20 point move that will occur within the next few days.  You can see how accurate and forward looking this indicator can be by looking at the VIX sell signal confirmed early this week which signaled the large rally we've been engaged in all week.  Now the VIX is signaling the stock market's rally is ending, or has ended, and will pullback 20+ points soon.

The wave count shows an impulsive rally that is incomplete.  Wave ((4)) is most likely unfolding which means it's possible some boring price action may be ahead of us the rest of the week. I do expect a quick new high for wave ((5)) eventually, and that will be followed by a sharp decline.  The VIX sell signal I mentioned above supports this.  Depending on structure and magnitude of that decline, it will help confirm my long term bullish count, or if perhaps something much more bearish is unfolding since the Brexit vote.

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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.

Elliott Wave S&P Futures

Although fundamentally and logically it does not seem accurate to think that the decline from last week is over, the wave count certainly suggests that it is.  There are signs both ways that build a logical case, so I don't want to get too into the weeds on where the market is going long term.  For the bullish case, the wave count, and current rally strength, support a long sustained bullish move.  On the other hand, I think it's unlikely that the S&P drop over 100 points in just a couple days and then bottom and shoot higher.  Usually tops and bottoms to big moves are a "process" that takes a while.  They tend to not be a quick "event".  Also, a "Flat Correction" is a sideways correction that is usually part of a 4th wave, not a wave 2.  2nd waves tend to be sharp and deep.  So although the count looks good, it's not really what I'd expect to see for a second wave.

So the longer term may be a bit fuzzy, but what is clear though, is that for the short term, the market is still quite strong and bullish.  There are not signs of the rally letting up.  So I will remain a bull until I see some weakness and signs of a reversal.

On a side note, I just wanted to point out how forward-looking my custom indicators really are.  Yesterday, you can see that my indicator registered over 170 stocks in the S&P with confirmed buy signals.  This was accompanied by choppy, and hard fought, price action sideways-to-down during that period.  Then, as the signals declined, which usually means the stocks have since bottomed, reversed, and have shot higher therefore alleviating the overbought condition and no more registering a signal, the stock market as a whole shot higher about 40 points.  I use this indicator, which is comprised of several custom indicators, to help make my stock selections as well.

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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.

Elliott Wave Options Signals - Short ULTA

ULTA confirmed a short signal on my custom indicators and has a completed 5 waves that should accompany such a signal.  Since wave (3) at Intermediate degree is over, a long 4th wave should now unfold.  It should make it to at least $220.22, even if it's just a triangle correction, but it could possibly continue lower to fill around $215.  Here is the trade I made near the close today:

Buy to open ULTA Aug 05  217.5/237.5 put vertical at $5.75

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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.