Friday the Dow was down 384 points, which was "only" 1.19%, but IWM, a much broader and speculative index, was down 2.70%. The equivalent of 2.70% on the Dow would have been 870 points. That kind of Friday close would have the capital markets on edge come the Open on Dow Futures this Sunday evening. That is the sense of this update, that next week will be a dangerous week which holds the potential for downside breakdowns in earnest. Although the FOMC meeting may be taking center spotlight, market action will not be far behind. IWM Intermediate Term Trading Model Noteworthy is that our Trend Model Sells came at the onset of Wave (1) Down, the beginning if Wave B Down, and now at what is projected as Wave 3 of (3) Down, the fastest, deepest "Down" yet. Current Open Expirations Of the positions being held going forward, IWM Puts stand out and reflect Friday's decline in real time real money returns: Note: Next week VIX Mar Calls expire on Wednesday morning so the $25C in the above table will be replaced by the April 19th $30C (more aggressive alternatives: $35C or $40C) WFC: From March 16th Sell Signal Much further to fall and that can't bode well for other banks, financials, or stocks in general. Excerpt from Elliott Wave Theorist March 17, 2023: EWI Link: FreePass to Changed World The Stock Market The rally that began on Monday of this week seems to have ended Thursday in the S&P and today in the NASDAQ indexes as well as both the S&P and the NASDAQ futures contracts. While the NASDAQ 100 soared nearly 1000 points in five days, the DJIA was so weak all it could manage was an upward running flat! (See text, p.48.) I think this “flight to risk” will turn out to be a bad idea. Figure 9 shows five waves down and three waves up in the S&P since March 6, which shows up most clearly in the S&P Globex (round-the-clock) futures. You know what “five down, three up” means: more decline ahead. The latest rally was yet another second wave, so the probability of a stock market panic beginning right now is very high.
