Last weekend I posted a chart of CVNA with the suggestion that this would be a new short once a new read arrow appeared. No red arrow has been forthcoming, but the stock continues to be overextended and the trigger price has risen close to $10 over the past week, sitting this weekend at $84: Special Situation: CVNA The stock is now just a few daily bars down away from trigger a fresh Sell Signal. The downside potential is huge insofar as a 50% haircut into the $40's would be possible and consistent with the 2021-2022 decline highlighted last weekend. We will monitor day-to-day for a potential Sell Signal, targeting Jun puts for a several hundred percent gain to expiration. Next Week: Say Hello to April As per Thursday's afternoon update, the market has yet to react to the PCE Report that was published Friday morning. The only tradable active post-report has been Bitcoin and it is modestly lower. Accordingly, there is no indication what if any effect the report, or Chairman Powell's interview will have on the market come Monday's Open. A sizable move in either direction will be tradable, but for now, we remain on the sidelines except for any calls still being held in BITO and/or GLD (table below). Accordingly, we will take our cue from the market's reaction next week to the inflation report with particular attention to interest rate and bond movements. The TLT chart below is being monitored in my PRO Service for a potential short trade as it is structured for a third wave decline. However, so long as price remains above the trend signal line shown, that interpretation is not actionable. So we wait: TLT Interest Rates The 10 Year Yield chart above is still locked in an uptrend, suggesting a spike higher toward 5% on the horizon, which would likely coincide with that third wave decline in bonds. Alternatively, a breakdown and red down arrow in this interest rate model would suggest lower interest rates and be bullish for bonds, stocks and likely Bitcoin as well. Bitcoin BITO Gold (GLD) Unexpired Options
