Despite today's headline grabbing rally, IWM is down from 240 to 190 since November and only about $5 of of its low @ 184 early in the week. Today's rally will be forgotten soon enough (not soon enough for some, including me). The EW analysis below, coupled with the Fibonacci extension study, is producing a measured Wave 3 target of at minimum 155, which is 30 IWM points lower, or about 15% from current levels. The next Fibonacci level lower is at 122, which is 63 points lower, or about 34%. My expectation is for a decline to between IWM 122 and 155. Time is more problematic. The first leg down, Wave 1 on the chart, took about three months. Wave 3's are generally steeper than Wave 1's, meaning that the target range should be achieved in less time. A fair assumption is that IWM will reach its target levels by June monthly expiration, i.e., June 17th, in about seven weeks. Stair-step down: Between here and there expect deep drops followed by sharp but short counter-trend rallies, like today. I would be adding Jun 17th IWM puts on these rallies, taking some May puts off to fund the Jun positions if necessary. TSLA: Now held hostage by a wave of "what if he has to sell TSLA to buy TWTR," sentiment. Buy 2024 calls and turn off the noise. The huge gains will be in EV, no matter what happens with Elon's hobbies.
