A Fulfilling And Passionate Vocation We pride our trading services on chart analysis in general, and making Elliott Wave Theory tradable in particular. In summary, we look for the end of counter-trend waves, labeled 2 and 4 respectively on the charts and buy leveraged positions via options for the expected waves to follow; waves 3 and 5, respectively. To our delight, many of the Wave 5's turn out to be Wave 3's, stronger and more dynamic than the waves that came before. When that happens, exponential option returns flow. Keep this pattern in mind as you review the charts below, both in stock indices and gold, what starts out looking like the final impulse could in fact turn out to be the most profitable leg yet. If so, a counter-trend leg (Wave 2 or 4) is inevitable, then, another impulse leg in the dominant direction of the trend and yet more exponential returns. This is our pattern recognition trading system in a nutshell. It only needs to unfold like that a few times a year to make trading a fulfilling and passionate vocation. Stock Indices - Chart Analysis The price patterns across all major stock market indices are virtually identical: Stock indices are early in a major selloff, presenting as the initial legs of a five wave intermediate term sell-off with much further to go to the downside. In Elliott Wave terms, the stock indices are entering into a third wave decline at multiple degrees of trend. I've labeled the most obvious examples in some of the charts below. The message is to take leveraged short positions in options, especially those sensitive to the technology side of the economy, QQQ, which appears to be leading all sectors lower. Let's take a look at the damage that took place toward the end of last week and turn our expectations to what's most likely coming our way in the weeks ahead. QQQ 240 Noteworthy is Friday's breakdown through the Fibonacci retracement zone that encompasses the entire Wave 2 count-trend rally up from March 13th (shaded rectangles) as well as breaking down through the Wave 2 up channel, and breaking down Friday to close below the key "Wave 3 Down" price level. Multiple key breakdowns - it doesn't happen every day and may be a strong indication as to what is on the horizon. IWM 240 Third wave down at multiple degrees of trend with iii and v (circled) of 3 due next. SPY 120 Another third wave down at multiple degrees of trend with iii of v (circled) of 3 next. SQQQ 240 I've drawn new parallel channels, this time horizontal, encompassing most of Wave 2's price movement. SQQQ has already broken above the downward sloping Wave 2 channel, bullish. A close next week above the new horizontal channel (> 38.50)- super bullish and a reason to buy even more SQQQ calls. Premium Service: April Stock Index Option Expirations Above: Our Premium Service standing bets on a bad two-three weeks ahead in the stock indices. Short-Term Traders - The out-of-the-money SQQQ Apr 17th calls in the table below represent High risk/High reward bets on a continuation of hard down in QQQ over the next few weeks. Note % Change column (far right) with Friday's SQQQ +8%. "You Ain't Seen Nothing Yet" Three Gold Charts Gold Futures Monthly Five waves up in just shy of a Fibonacci 55 years and Nixon's Gold Fix Gold Futures Daily Pattern recognition software nailed it. GLD Daily Our EW Trading System (in a nutshell): Positioning at breakouts of even numbered EW's (counter-trend) for the inevitable impulse legs - odd numbered - higher. GLD Apr Expiration We've been long Gold since these Special Alerts went out on Jan 30th and Feb 4th. The GLD April $265C has about tripled in the interim and while the charts are bullish, they are on multiple levels counting five waves up. Maybe there's is another five up due, or maybe not, the pattern will speak for itself. For now, we are still Long and intend to roll over our calls to higher Jun strikes, at Apr expiration, unless GLD prices tumble in the next two weeks, taking us out via the 50% trailing stop. Either way are have another triple digit gain locked in. Active Option Trades Premium Trading Service PRO Trading Service
