The Long & Short Of It Two high probability pattern recognition trades are emerging, QQQ & IWM Short and BABA Long, one of which is bound for triple digit gains, maybe multi-triple digit. My job is to convey them as they arise and suggest option plays to maximize returns. Sometimes, like today, they are giving opposing messages. Some of each seems the best bet, for now. Let's get to it: QQQ & IWM The biggest game in town continues to be, "sell the market," in general and in particular, anytime QQQ closes below 500.00. Let's have a look as of mid-session Wednesday: QQQ 2 Hr A QQQ series of Waves 1 and 2 (shaded rectangles) and solidly below 500, targeting 480-460 sometime around March monthly options expiration. We like buying time over strike, so as of Monday's Special Market Alert, our preference for new capital is into April 17th expiration. Note the outlier Wave V (circle) Fib extension target in the 430's. IWM 2 Hr BABA - Wave 5 Buy Signal (3 Hr chart) This is a "Wave 5 Buy Signal," for BABA, targeting $175 over the next six weeks. Seems unlikely if the QQQ is headed down in a Wave 3, but as I used to write on these pages almost daily, "A signal is a signal" and none of us know for sure what the market, or any one stock, is going to do tomorrow, let alone next week or next month. Bottom Line The market continues to flirt with the hard down scenario and that is my sense for what is next. Whether its a matter of days, or weeks, or months, is more problematic. Ergo more updates than usual for both services.
