We've been waiting for an end to the counter-trend rally from late March, which I am labeling an Elliott Wave "2" prior to the main event, a Wave 3 down into mid-to-late summer. In trend following parlance, it's a simple reversal back into the dominant trend. If the retracement is over, then the June puts we have been buying since mid-April will have plenty of time to make up lost ground. New trades will be going into July which could be the eye of the storm. DIA - Daily IWM - Daily The Nasdaq 100 has been leading the entire rally. But today it made a new high and then closed 2% lower on the day. As the chart below indicates, it is sitting right on its upward trend line and a second day of weakness tomorrow will be the icing on the cake, and a high confidence confirmation that prices are heading lower to take out the March lows. Nasdaq 100 Forecasting market direction is fraught with danger. Buying options based upon forecasts is mental. Nonetheless, patterns that repeat create opportunities and this particular pattern, a potential Wave 3 that follows a steep retracement of a what was a crushing Wave 1 down doesn't come around all that often. As it unfolds, let's make the most of it. If the market is indeed on the cusp of a multi-month decline expect numerous new trading signals to exploit the move. Finally, VXX triggered a Short-term Stochastic Buy Signal today in the PRO Service. If the dire outlook above is correct, look for a VXX Intermediate Term Stochastic Buy in the days ahead
