While it is possible that Friday's selloff will be another one of those, "one and done" daily craters, quickly recovered next week with the indices soon to be threatening to make new highs across the board, there is compelling evidence to the contrary. My best case scenario suggests downside action is only about half-way finished, with another few days and deep dives before a tradable bottom. Worst case? In the words of market guru, Robert Prechter in a special alert sent out late Friday: "The speed of the breakdown in the diagonal today fits our expectations for a serious shift from bull to bear. I think we have just seen the top in a Grand-Supercycle-degree advance dating back 237 years." Ending Diagonals, Courtesy of Elliott Wave International The ramifications of this statement and analysis suggests something much more dramatic to the downside than my expected, "cycle lows into October." On the chance that Prechter is right (let's handicap that possibility at 50-50, for now) than the opportunity presents great short-to-intermediate term trading potential. We have the tools, mental acuity and pound the table enthusiasm to guide traders through any phase of panic that is about to set in, including, wave three's down at multiple degrees of trend, of which the first of many would only just now be getting started. Worth the price of admission? A token subscription and the will to follow instructions as the bear market unfolds is all that is needed. I'll supply the tactics and option picks, as I did early Friday in the PRO Service and late Friday in the Premium Service with new forays into QID Nov calls. For every dollar put at risk, there are potentially five to ten dollars of reward, a formula that could repeat, week after week, well into Nov expiration and beyond. Do I have your attention, yet? Going Forward: Next Week Monday could open with a typical and ultimately meaningless retracement of part of Friday's losses. It's what happens next that matters most. Since our most recent purchase in both services is in QID calls (Leveraged inverse QQQ calls) let's focus this weekend on QQQ and what the charts portend over the next few weeks. QQQ Daily QQQ Hourly: "The Bullish Case" QQQ: "The Bearish Case" QQQ Weekly The long term trendline up from the March 2020, "Covid lows," has once again generated a Sell Signal. The past two resulted in declines of 15% and 25%, respectively. If the current Sell Signal (as of Friday) splits the difference, we are looking for a 20% decline, or a drop of 120 QQQ points to about 480 or so. That takes QID up to at least $25 by November 21st options expiration. QID Daily Minimum expectation is for QID $25, or about a triple on the QID Nov 21st $22C which closed the week at $1.50.. A five or even ten bagger is not out of the question should the market's "panic" phase be just around the corner. UVXY Daily We bought the UVXY Oct 17th $12C on Sep 23rd and holding without a stop would have seen this option turn positive on Friday. With a week to go until expiration, it could still pay off big time: UVXY - New capital With chart targets between $18-24, these Nov 21st $15 UVXY calls are well situated for 5X to 10X returns if October turns dicey...or maybe it already has. At the April 2025 market lows UVXY's high tick was $53.21. That could turn the $15C into a 20-bagger. A boy can dream, right? Active Options Note: Friday's market action triggered profit taking stops on many of our positions in both services. Going forward, taking out Friday's lows (not that far away) is the first indication that the worst is yet to come. Be prepared. PRO Service Premium Service
