Since Tuesday's Premium Service Update we have been isolating the time and price area where this counter trend rally would most likely reverse back down into the dominant trend. On Wednesday price reached just above the upper boundary of the reversal window before turning down into the end of the week. The expectation now is for the next leg down, below the Jan 24th lows, to unfold in the days ahead. Price rise to top of Reversal Window and turned down The chart below counts a series of Waves 1-2, 1-2, on different Elliott degrees, each retracing just over 62% of the previous wave. This pattern suggests a hard Wave 3 down on multiple EW degrees next week. Two Wave 1-2's with 62% Fibonacci Reversals IWM - a slightly different wave count but still bearish The focus has been on the stock market indices almost all of January. The reason being that price patterns being bearish enough across all market indices to be looking for a multi-week trading opportunity to the downside, one that could include exponential option returns. The Feb 18th index options in both Premium and PRO Services have had some exponential returns, albeit reduced by pesky Wave 2 counter-trend rallies. If the above hard down Wave 3 analysis (second chart) is right those sizable returns, highlighted in "Best Return" columns, are coming back. Premium Service Index Option: IWM Feb 18th $210P PRO Service Index Option QQQ Feb 18th $375P & SQQQ $35C Note that the best level returns on all three of the above positions is over 600%. Next week could revisit those levels, or maybe it will be the week after. Beyond that we will be rolling into March options. Only a rally that is strong enough to take out previous highs changes the bearish implications of the price patterns in the above three charts.
