The Big Picture Let's start this Holiday Weekend Update with a look at a murky big picture outlook. Up until Friday, the market indices were tracing out an almost perfect counter-trend rally into the top of a downward sloping trend channel. Friday's gap-up open turned it all, "murky," at least for the next three days. IWM QQQ Both IWM and QQQ sport the same bearish set-up, including Friday's rally to the Fib .618 retracement level and turn down into the close. The good news is that any further strength next week turns the picture much more bullish, making the case for, "all in on TSLA" as set out below. SPX SPX above sets out the bullish case for next week. Friday's price action, innocuous as it may seem, is not consistent with the beginning of a major downtrend. It keeps me from being too bearish, nor is it dynamic enough to be wild eyed bullish post-inauguration. Bottom line: buying TSLL calls but no other new longs...for now. TLT Our TLT trade from Dec 11th is still alive and well, but now subject to a 50% trailing stop from high Best Returns. Target for move remains in the neighborhood of $83-76. TSLA: All In? The charts below show TSLA breaking out of its Wave (iv) retracement channel and like it or not, we have to assume that Wave (v) is underway to $600 and points north. Note on the chart below how after TSLA peaked @ $488 in mid-December, it declined into the shaded Fibonacci retracement rectangle, which would be minimum required for a completion of the retracement phase. Price rose off the Jan 2nd low of $373.04, finally breaking above of the downward sloping Wave (iv) channel on Friday, triggering a fresh Buy Signal. Although the immediate target is $600, targets past that level are $800, then $1,200 after that. TSLL It is inconceivable that TSLA will rise to $600 or more without pulling other stocks up with it, along with QQQ, IWM and SPY. Accordingly, if the market is up next week we will be looking at other long set-ups, i.e., a post-inauguration rally that takes other stocks along for the ride. For our purposes this weekend, let's get everyone situated first with our #1 stock pick for the year, then move on to other names from there. Recommended Calls First, these calls are still "Active" from previous Premium Service recommendations. Money management suggests that once a position is up 100% that we apply a 50% trailing stop, i.e., that some-to-all of the position be exited if the Best Returns percentage suffers a 50% haircut. "Some-to-all" means as much as half the original position can be held, "just in case." If so, as of late Friday, accounts could be still holding some of these two positions: Needless to say, if still holding these calls, continue to HOLD through expiration, or exit if they drop further than about break-even. If seeking to add to or establish a new position, any one of these calls works, with my favored strike ($40.00) highlighted: Finally, one our best trades of 2024 was a nine month bet on TSLA made in April, 2024, described as follows: "THIS IS AN EXCELLENT RISK:REWARD PROFILE. Embrace it." Let's not go quite that far out in time, but far enough to allow for a bump or pop in the next few months. Our TSLL chart suggests $55-75, which makes the June $40C destined to be deep-in-the-money, the only question being "how deep?" SOFI Financials looks strong and maybe a sector to look to if the market has another leg up in it. Along with SOFI, XLF, GS, JPM are also on my radar. If our trailing stop on TLT gets hit, we will be looking for additional calls here. Option Tables PRO Service Premium Service Trading Notes A good many trades from the 3rd and 4th quarter of 2024 went off the board with the Jan 17th options expiration. We will be adding more positions in the weeks ahead as the market tips its hand on direction and velocity. Top Four Positions From Jan 17th Expirations Note: All were calls and all had a minimum of four months from entry to expiration.
