Executive Summary Ten days into August and the crash window first discussed in late July remains wide open. As can be gleaned from the charts in this report, all that early August has given us so far are deep initial dives across all indices and typical Fibonacci retracements. In the world of pattern recognition, there isn't much more room to rally before the bottom falls out. The longer it takes, two things happen: First, the crash becomes more imminent, and second, the crash narrative moves closer to being questioned. The Big Picture The first chart below is the Daily DJI. It is set up for a 10% gap down Open on Monday. Set-up doesn't mean that has to happen, only that the pattern is there. Not every weekend ends with a set-up like this, where there is are fundamental, geopolitical and technical reasons to expect a worst case scenario, but this weekend fits the bill. The good news is that market crashes do not announce themselves days or weeks in advance, they just happen and do so with the fewest number of individual traders on board as possible. I could be preventing a crash just by pounding the table for one. You're welcome. Not really, as baby needs a new pair of shoes, so to speak. (In my case, its time for a new Tesla.) The alternative would be to keep what I see all to myself, not write about it, or suggest option plays to capitalize upon it, just trade it for myself. But there is no, "I told you so," by keeping it to myself. Nor would it be fair to see it, expect it, invest in it and not share it with paying subscribers. You get your money's worth, or I don't do this anymore. On this choice, I'm going with for the former. Charts This first chart below may be the most important and easy to understand chart in this update. The shaded Fib square contains all of the retracement zone that price is likely to rally and it does allow for a few more daily price bars before Wave 3 down asserts...but not much more. On this Dow chart, that projects at least 2500 points lower. Any price rally above the shaded zone puts the entire bearish narrative at risk. The good news is by this time next week the market will be well on its way to new highs, or new lows. On this choice, I'm betting on the latter...for now. DJI Circuit Breakers: A 7% decline halts trading for 15 minutes, but it takes a 20% decline to halt trading for the rest of the day. That window, between 7 and 20 percent, may not be open very long. Good luck in reaching your broker. IWM The last major index to top out, still early in its decline, but sporting the same ominous "gap down pending" look as the Dow - a few daily bars sideways-to-up still possible without bringing into doubt a bearish resolution. QQQ Daily Kissing the long-term channel good-bye, like the Dow, just a few bars allowed before hard down. QQQ 120 Minute My most bullish QQQ wave count, "only" a drop to below 400 before a large ABC rally in front yet another deep leg down. QQQ Puts - Premium Service Under normal trade management conditions, we would have been out when these puts declined below +400%, but I haven't sold a single one of my puts, including the PRO Service puts (with even better gains in both QQQ and SPY.) If next week is hard down, I'm rolling this strike into the QQQ Sep 20th $400P...or lower. SPY 120 Minute Echoing a the worst case scenario of the DJI chart above. SPX Daily Any further rally next week above that dotted red line coming across from the Wave 1 low would be the first indication that something other than an imminent crash is unfolding, I will update this chart as conditions warrant. SH If SH were to open (or close) above $12.25 buy the Jan 2025 or Nov 2024 $12C - With both hands. PLTR - Weekly Long Term My second favorite stock to own longer term, behind only TSLA. Caveat, there is no wave count on this chart because there just isn't one that works for me. That doesn't make the chart any less bullish. If I'm wrong about the big picture bearish scenario unfolding in the weeks ahead, this and TSLA will both be much, much higher going into the new year and multifold call returns will be forthcoming in both names. PLTR Calls PRO Service Note: These call returns look good, but only after suffering more than a 50% drawdown from Best Return levels (lows last week = $22C = 2.40 and $25C =1.29). Nonetheless, we always recommend hanging onto a small position, even when stopped, "just in case." Last week's earnings driven 50% share price run = "just in case." Premium Service Absent a market crash, in five months PLTR should be in the low-to-mid $40's and these calls up 3X to 5X from current levels. The low on this call was 1.37, just before earnings.
