Believe it or not, I have been bearish the stock market since early November. This past week finally rewarded that stance as every major index appears to have topped and begun what could be a vicious cycle turn-down going into the end of 2025 and possible extending well into next year. Pattern Recognition - SPX Updated These two SPX charts are what led to my bearishness, now updated from early November when first introduced to this service: SPX Long Term (2-Day) The last price failure at the top of the parallel channel occurred in Jan 2022 and resulted in a decline to the lower channel trendline, a drop of 28% over 10 months. SPX Short-Intermediate Term (120 Minute) Despite Friday's attempt to hold the fort, the shorter-term pattern remains bearish and portends a 10% decline into the end of the year. That would move the needle to extreme fear and would likely lead to a vigorous rally before yet another leg down asserts. We will cross that bridge if and when it manifests. For now, the path of least resistance is down. On second thought, it's more than just "down", as the short-term wave count on QQQ suggests, a wave iii of 3 is pending and if so, traders should be all in on the short side, however you define both, "all-in" and "short-side." QQQ Hourly: Wave iii of 3 Down - Pending Note Friday's low QQQ print: 597.18: Any close below that price level would be a strong confirmation that a wave three down at multiple levels of trend is unfolding, targeting 560-520. SQQQ 120 Minute: Wave iII of 3 Up - Pending Stock & Bitcoin Open Positions All three positions are poised to take advantage of what's coming over the next 4-6 weeks. Note "Best Return" shown for Friday in QQQ and SQQQ positions, over triple where they closed. Bitcoin/IBIT Our new trade is a bet on Bitcoin dropping to previous support as indicated on the charts below and yes, Bitcoin is a leading stock market indicator. If the above implied depth of decline pans out, we can expect significant percentage gains on the IBIT puts. Worse case: a -50% drawdown and exit. Active Options PRO Service Premium Service
