Executive Summary We have spent much of this year preaching at the alter of the stock market cracking and heading down, hard down. This past week is a start, key word: start. As I have done in many weekend updates before, much of my analysis and strategy set out this weekend is derived from the index charts, with pertinent comments appearing underneath the index at hand. As will be readily apparent, the message from the indices individually, as well as collectively, is the same: "Buy Puts." Strategy The market began falling apart as I went to press in yesterday's Into The Close and it is all but set up for a decent breakdown into early next week. The intermediate term trend is as close to a third wave down at multiple degrees of trend as the stock indices have been in the past few months, if not years. If so, the days ahead will be filled with trading halts and headlines of outsized fonts heralding, "market crash," in multiple iterations, stirring up fear and dread across market participants. It could be the one time that jumping on the consensus bandwagon will pay off. My personal option portfolio, painstakingly crafted over the first three months of this year, is filled with puts, among which are: IWM, QQQ, XLF, IBIT and GDX. Although most started out with March 20th expirations, over the past two weeks I have been rolling most of them over to April expirations. As for calls, the sole long bets left standing are XOM, CVX and XLE with expirations in April to June. Looking ahead, I am locked and loaded for that elusive third wave down that takes no prisoners. Anything less will be a disappointment. On the other side of whatever low is put in over the days. weeks and/or months ahead, a bullish opportunity of a lifetime. Worth the price of admission? You betcha! Charts & Analysis DJI - Weekly The minimum expectation, basis this 8-year DJI Weekly chart pattern, is for a drop to the dashed blue mid-line, about 2,500 points lower. More likely is a collapse to the lower parallel trend channel, some 6,000 Dow points lower. Below that? You don't want to know. DJI 3 Hour The DJI Fib extensions are suggesting an ultimate break below 40K as part of a third wave at multiple degrees of trend. Could even lower targets be on the agenda? The nature and extent of the current decline will determine any such catastrophic potential. To be continued... SPX - Weekly We have been monitoring this S&P 500 Weekly chart since the initial break below its 8 period EMA in early February. It too is suggesting a deep dive...closer to a beginning than an end. SPY 180 Minute "Third wave down at multiple degrees of trend." QQQ Daily Well, well, well...this Q chart was teased on Friday's Into The Close, famously stating that if 580 was broken, then 450 would be the target, AND, that in that case there would be plenty of time for QQQ puts. Note how horizontal support going back to the indicated Wave (1) low last October was broken on Friday, ever so briefly, toward the close of trading, but for how long? A hard break next week would suggest more Nasdaq pain, imminent. IWM 240 Minute This IWM 240 Minute chart shows a clean third wave at multiple degrees of trend, still well above its ultimate target price levels. IWM has cleanly broken its Wave 1 low from early March, suggesting Wave iii of 3 is in control, with much lower prices, imminent. Bottom Line Absent unexpected geopolitical nirvana, next week should be hard down, if not right out of the gate on Monday, soon enough thereafter. If I see an opportunity to dollar cost average into more index puts, IWM and/or QQQ, I'll post a Special Update. I trust my message of the past few weeks has gotten through and all traders have sufficient downside positions. Nonetheless, there is always room for more. Our Main Bearish Option Position This position was a roll-over set out in Wednesday's Mid-Week Update. That the puts are already up 50% in less than two days is suggestive of the kind of returns to come in a third wave across any stock index, IWM, QQQ, SPY or DIA. The March 20th IWM $255P, which was held from Feb 3rd, closed at expiration +26.43%. CVX Weekly "Big Oil" A triple, with still months to go to expiration. Gold & Silver My bearish take on precious metals has been spot-on and when the time is right, we will go all in on a rally to new highs, but not just yet. The PRO Service has a 300% winner via GDX Apr puts, but the trade didn't make it to the Premium Service in time to benefit from last week's Gold decline. We will stand aside for now, watching and waiting for the right set up to go long both GLD and SLV. Truth be told, right now focus should be on a bearish stock market anyway, with the only exception being long select Big Oil calls. Therein lays the dilemma, where to place the anticipated Wave C low? Somewhere between $4,200 and $3,800 is my guess, but we won't know for sure until well past the low. On the bright shiny side, new highs above $6K should make our exact post-low entry long, more or less irrelevant. Bitcoin BTC 2 Day The Wave 5 target for Bitcoin lays between $40K and $16K, due sometime this summer. I suspect a collapse to coincide with a similar debacle in Nasdaq, which according to the charts and analysis above, is imminent. Either my analysis is wrong, or, this is an opportune time to add to IBIT Jun puts. IBIT 2 Day Active Option Tables "Active" = Unexpired and not exited (yet) pursuant to a -50% hard stop. Premium Trading Service PRO Trading Service
