Executive Summary The stock index charts below are alarmingly consistent in their respective unfolding patterns, i.e., that a third wave down at multiple degrees of trend is ominously close at hand. We have been adding IWM/QQQ puts since early February, resulting in positions in either March or April monthly expirations that are poised for substantial appreciation in the weeks ahead. Although a retracement rally could be in the cards early next week, the overwhelming odds are that next Friday closes much lower than Monday's open. If so, even those early puts bought the first week of February will likely be deep in the money by next weekend's update. IWM Starting off weekend charts is the cleanest and clearest of our trading charts, IWM Daily, where from the high print of 271 on January 22, 2026, the index is tracing out five waves down, targeting an interim low around 230, sometime this spring. Note how Friday's close penetrated the lower parallel trend channel up from the April 2025 low. The next key threshold will be around 245, the actual strike price of our 245 puts, but hardly where we expect this decline will end. I routinely monitor the relative strength of key indices to each other and in particular, IWM versus QQQ. It's rare for IWM to exhibit relative strength above that of QQQ, but that is exactly what happened last week. It portends continued weakness for IWM relative to QQQ and with both indices much lower over the next 2-4 weeks. QQQ 240 Minute Key takeaway here is that a decline to QQQ 290 and below opens the trap door down 100 points. That doesn't mean it has to happen, only that we need to be on the lookout for the pieces to fall into place, precipitously so. DJI Daily Another relatively clean wave count suggesting a third of a third on the precipice of hard down: SPY 240 Minute And finally, an updated SPY 240 minute chart with an EW count unfolding to much lower levels next week: Bottom Line: All indices above are lined up for further weakness with the worst of the decline still ahead. That's not a guarantee, nor even anything more than say a 50-50 probability, but even those odds are suggesting if it starts happening anytime in the next few days, it's not too late to pile into nearer-term puts (March-April OTM). March QQQ/IWM Puts Even though we bought the March puts a month too soon, they stand this weekend primed for significant gains on any further weakness in the stock indices over coming few weeks. New positioning still favors April expiration for all but the most aggressive of traders. April IWM $245P - The best is yet to come. April QQQ $550P The Apr QQQ $550P could have been bought anywhere between $6.25 and $8.86 on Friday. My price target for QQQ over the next few weeks is closer to $500 than $600. Shorter-term, consider the above-referenced March 20th $590P, which closed Friday @ $10.70. Gold While waiting for Wave 4 to end, Gold is finding some temporary support along its upward parallel trend channel coming up from the early February "crash" low. Unfortunately, price is only one red bar away from targeting the lower parallel trend channel up from the November Wave 2 low, which comes in around $4,000-$4,200, about $500 below current price. This is not a high probability long trade and in fact, one red bar and it turns into a higher probability short trade. Speaking of which... GLL (Ultra Short Gold) A GLL breakout (equivalent to Gold breaking down) targets low $20's, setting up for a quick 3X-5X on at-the-money GLL April calls. It will take a GLL close above the downward sloping parallel trend channel to trigger the trade. We will look at GLL calls for a trade only if this occurs. Active Option Tables PRO Service Premium Service
