Bottom Line Next Wednesday will be quite the after-hours show as earnings are reported by GOOGL, MSFT, AMZN, and META. One day later, AAPL reports. Will this market come out of next week unscathed? As new all time highs keep piling up we are getting closer and closer to a tradable top. I'm betting sooner rather than later, but am not yet to the "all-in, pound the table for puts," as I was earlier this year. Bottom Line: (Rewritten) No one rings a bell at the top, but after reading over my final draft of this Weekend Update, I'm rewriting this Bottom Line: If it looks like a top, acts like a top and trades like a top, it's most likely a top, or damn near close to one. Next week, look to start accumulating short positions. I'll update as necessary in the days ahead, but as of Saturday, I'm eyeing June positions in QQQ puts and SOXS calls as the vehicles of choice and maybe as early as Monday. Look for future updates to confirm new positioning. Focus On The Upside I have my eye on a couple of stocks that we can ride higher, with Nasdaq, if that is the direction it wants to go. No surprise that those two stocks are TSLA and GOOGL. A fresh entry on TSLA is in the works, but just not yet. As for GOOGL, it is up against some pretty stiff resistance between $340-$350, which needs to be overcome to target $500 later this year. In graphic form: GOOGL 2-Day A test of the Wave 4 low ($272) is as likely as a breakout above $350 - either of which will trigger new call recommendations for a Wave 5 leg to $500-$600. TSLA Weekly This is our roadmap for TSLA, with a week still to go in April and a potential test of the previous low around $335 still possible. Then the run to December. Focus on the Downside For starters, your attention please to the first chart below, the 5-year Weekly candlestick chart of QQQ. Note the parallel channel trendline touches at major inflection points, highs and lows, with only a near miss at the April 2025 low keeping this chart from being virtually a perfect timing tool. Oh yeah, it touched again at the close yesterday. Now you know why I like SOXS calls and am itching to buy QQQ puts next week. The bottom channel, the most likey target, comes in around 450 at June options expiration, while mid-channel is at around 580. QQQ Weekly Look for the next's range in the weekly bar to top out just above the top of the channel, but to close back below it. Now that will be a pound-the-table shorting opportunity. Any rally above the top of the channel that is followed by a price close back inside the channel is a trigger to aggressively accumulate short positions. QQQ Jun Puts SPX Weekly S&P 500 also tagging the top of its parallel channel going back to 2020 Covid lows. Same analysis as QQQ above holds here: A price break above channel that closes back inside the channel is a classic Intermediate Term Sell Signal. Volatility Poised For A Breakout VXX Daily VXX compressing last week, poised for a breakout targeting the mid-$30's gap. Look familiar? Semiconductors have a similar 5-bar consolidation on VXX Daily chart set out above. VXX May Calls Aggressive play here with May VXX $32 calls, but only if Monday is a hard gap-down kind of day. Unique Charts of Interest Mid-Term Elections & Market Corrections Shaded vertical = market corrections, all after May 1st of mid-term election years. Yes, that would include 2026. Dow Jones Transports & Semiconductors Fill in what comes next for semiconductors: Next week, or the week after; next month or the month after, it won't matter. Quote From Elliott Wave International, after close on Friday: "The SOX index is in a historical blow-off, having closed higher for 18 consecutive days. The index is up 48% for the month of April, so far. In the final throes of the dot-com mania in 2000, the SOX surged 84% from February 1, 2000 to March 14, 2000. The SOX then declined 85% in the bear market which followed until October 2002. The March 14 top occurred with a large outside-down day. We are watching for a potential similar occurrence." SOX Weekly 2000-2002 This SOX Weekly chart chronicling what EWI described above: The March 2000 top and subsequent 85% drop into October, 2002. It is what convinced me to rewrite the Bottom Line with a much more bearish tilt. Pattern recognition is written all over this weekend's charts, QQQ, SPX and SOX, past and present included. We need to heed the warnings and position accordingly. I will be monitoring and acting on any excuse to get short, again. SOX Weekly 2020-2026 Same analysis as the QQQ & SPX charts above: A close back inside the parallel trend channel up from Covid lows is our trigger to buy SOXS (3X Bear SOX) Jun calls. SOXS Jun Calls Prices as of close Friday, April 24th ACTIVE OPTIONS Note: New trades are likely as soon as early next week in both trading services. PRO Service Premium Service
