A Blast From The Past: "If IWM does not breach this key level in the next few weeks, we will reassess, but for now IWM 210 is our call to arms that something massive on the downside is imminent and in fact had already started. It's in the chart and will manifest in the anticipated price action; an opportunity for exponential returns in index puts." - Weekend Update, Jan 08, 2022 Three weeks later, the IWM Feb 18th $210P bought on Jan 5th was up over 600%. The stock market ended 2022 about where it ended 2021, with me pounding the table for a new leg down. IWM closed the year at 222 on its way to a low of 188 before the end of January, a decline of about 15% in less than a month. During that period UVXY would rise from a low around 11 to a high at 22.39 on Jan 24th. There was another market dip in February and third decline in March. Below is a table chronicling all Premium trades and their best returns from the first quarter trades of 2022: First Qtr Trades - 2022 (Blue Line Premium Trades - Entry to Best Return) As we enter January 2023 trading, the dominant Elliott Wave pattern is a Wave 3 down at multiple degrees of trend, more bearish than a year ago so the gains to be generated by our 1st quarter of 2023 trades should be commensurately higher by every measure. Note that only two of eight trades from the 1st qtr of 2022 failed to at least double in value from entry, and four of the eight reached deep, deep into triple digits. [Link: Boy Scout motto.] IWM 2022 IWM is setting up for a Wave 3 down at multiple degrees of trend, Waves iii and 3 and (3) all due during the first quarter of the new year. Accordingly, new trades taken in January will be going out to February and March monthly expirations (third Friday of each new month). As current positions become deep in the money (by at least 2-3 strikes) we will roll over into new strikes and months. Nasdaq - 26 Week EMA - One long term chart, one long term message. SPX - Next leg down The EW pattern on the S&P 500 chart above sets out the approximate "multiple degrees of Wave 3 Down" due between now and both the January 20th and February 17th monthly option expirations. A hard break below 3780 = Plunge, plummet or crash. By this time next week we should have a much better idea of the velocity of the next leg down and both services should be standing by for a new volatility trade in the days ahead. VIX: Taking off with the new year(s) Minimum expectation is for VIX to double over next 1-2 months IYR - Sleeper Trade of 2023 Re: Sleeper Trade. What can cause real estate to tank this year? How about high interest rates going into a year-long recession? Short via puts (Feb/Mar) under $85, target lower trend channel line, <$70 by March expiration. 20 Year Bond ETF US 10 Year Bond Yield This was my last post of 2022, which due to a failure of timely posting, has now morphed into my first post of 2023. Nonetheless... ....To all who are reading these words, my very best to you and yours for the happiest, healthiest and most prosperous new year yet! Allan Harris Developer, Chief Strategist and Head Writer Blue Line Trading System
