Next Wednesday is another FOMC day, the first one after the most recent tame inflation reports. Both the anticipation into and reaction subsequent to the Fed's take on those inflation numbers will affect market action and potential volatility. It will be a difficult week to be nursing options positions and therefore all the more important to have a grasp on the big picture when the dust settles. Friday's rally in stock indices was a preview of market expectations coming next week. How long and how high it might continue, if at all, is unknown. I've attempted to account for the most probable contingencies in the stock index charts that follow. Note where my shaded Fibonacci retracement zones sit, most just above Friday's closing price levels. Ultimately, everything that is being recovered in this annoying counter-trend push will be given back and maybe painfully so, i.e., an out of the blue gap down into hell kind of day. Absent a more immediate Fed or geopolitical surprise, that will push our next exponential option payoff into April, missing March by a whisker. Nonetheless, in the past few days we were able to get a hint of exponential wins, albeit mostly via unrealized gains; over 600% in the SQQQ March 21st $32C, closing the week with a gain of 434%. IWM puts were not too shabby themselves, reaching a Best Return high of 455%, while closing the week with a standing gain of 280%. If the EW counts below are even close to accurate, we should see at least as much in the 2-4 weeks ahead, using April 17th as our new anchor expiration. March 21st Stock Index Positions On To The Charts; The Shape Of Things To Come IWM Weekly To not expect price to at least touch, test, and for a time to exceed the 5 year trend line would be fantasy. It's looming right below this past week's close, leaving the real question whether there will be climatic reach and bottom, or, slicing through same like a hot knife through butter. DJI Daily A rather large retracement zone, but it will shrink as the week proceeds. SPY 2 Hr Maybe the key index to watch next week. QQQ 2 Hr The shaded zone shown in this chart is a combination of two EW-Fib measurements and so far, working in sync to form stiff resistance. An inverted head and shoulders (bullish) or, a virtually perfect counter-trend a-b-c (bearish)? SQQQ 2 Hr An SQQQ print above 50, if in our future, is more likely an April event, not March. IWM 2 Hr Room to drift higher...or not. Gold Futures 120 Minute The line it is drawn, the curse it is cast The slow one now will later be fast. GLD 60 Minutes From Feb 4th Special Alert: Active Trades PRO Service Premium Service
