Long ago I stopped allowing one day's market action turn my head around on intermediate term market direction, but not unlike seeing a pretty girl a the nude beach, sometimes you catch a glance and just have to turn and stare. These charts that follow are brutal for any kind of bullish case and to be perfectly frank with everyone, two of these charts are one down day away from my banging the table all in on aggressive short positions to the downside. One day does not a panic make, so let's take a peak at Friday's dip, together: DJI The DJI is approaching the lower (blue) trend line of its upward channel from last summer, it is major, major support. A close below that channel, about 42,750 on Monday (650 points below Friday's close) or a break below the red horizontal ray (41,845) and its curtains for the bull market and an examination of worst case scenarios will take center stage. SPY QQQ IWM I saved the worst chart and set-up for last as it remains the most ominously bearish of all of the above charts. Ugly doesn't begin to describe the implications of this breakdown, but let's not get ahead of ourselves. Remember the pretty girl on a nude beach...and those red rays just below Friday's close on the QQQ and SPY charts. It takes them both being broken to the downside before its time to go all in on shorting this market. Until then, let the SQQQ calls and IWM puts from Friday's Into The Close suffice as our short positioning, just another couple trades for now. If it is destined to take on something of larger magnitude than an intermediate term dip, we will know soon enough. SQQQ 30 Minute The beginnings of an impulsive leg to the mid 30's and maybe higher. Like every bearish chart above, this bullish chart needs continuation price action to gain credibility in its implications. One-day wonder declines over the past year have all fizzled out, i.e., nothing to see here. If this time is different, our modest position in SQQQ calls will be a 10 bagger and likely just the first of several. BUT WE ARE NOT THERE YET. Follow through is what to look for next and if we see it next week, expect to be adding on to short positions as prices begin to tumble. TSLA Wave (iv) has been characterized by a series of lower highs and lower lows, Another lower high was put in on Feb 19th @ $367, from which TSLA has now declined to $334. The previous low was Feb 11th @ $325, so any further decline below that level will mean Wave (iv) is still in play with a break below $300 still possible. A year from now, above $600 and getting there will be all the fun. Just not quite yet. TRADE MANAGEMENT If following our trailing stop guideline of exiting a trade that's Best Return exceeded +100% whenever that maximum gain is cut in half, then many of our blockbuster wins of the past few months have been closed out. That means I'll be looking to add new trades in both services in the weeks ahead. Let's get through whatever mayhem, if any, the market has in store for us next week, especially past NVDA's earnings call on Wednesday. Note: As bad as Friday seemed, there were still names closing positive on the day, in particular BABA and MCD. Something to keep in mind going forward. Active Option Tables PRO Service Premium Service
