This trading service started in January, 2010. We evolved from "AllanTrends" into "Blue Line Trading" along the way, a bow to marketing, replacing name with a color, as though that somehow would translate into new subscriptions. Now, some 13 years later, it is less about names and colors and more about option trading and making money in the great casino that is the stock market. Happy Anniversary - especially to those still loyal charter subscribers from that first month of 2010, which seems like so many, years ago. Thanks for coming along this journey with me, and batten down the hatches, the year has just begun. A Charles Dickens Market “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.” ― Charles Dickens, A Tale of Two Cities Some of the worse performing assets of 2022 have been the best performing assets of January 2023. TSLA is a perfect example, down 65% in 2022, the shares are up 45% for January as we are going into the last trading day of the month. Impressive, but TSLA is still down 50% from where it started out in January 2022. Bitcoin is another example. It was down 65% in calendar year 2022, but up 40% in January 2023. Think about that: TSLA and Bitcoin, two as disparate asset classes as can be, are both down and up almost identical percentages for 2022 and January 2023, respectively. Something other than a new bull market is going on, it's called a retracement in ongoing bear markets and every pattern and indicator we follow is pointing to an imminent end to those retracements. Our Key Levels are holding up and in some cases rising with this new year's rally, but that too should be ending soon. We are day-to-day on new positions so be alert to "New Trades" in the subject lines on our updates and alerts, as we begin our 14th year of trading signals, waiting for the ball to drop on the next, big, exploitable market move. SPX - Two Key Levels: 4000 & 3800 I'm keeping the Fear & Greed index on this chart for now because it remains in trigger mode, requiring only a modest turndown to break the first Key Level. A turn-up in volatility would make matters worse. Bitcoin - Potential to previous Wave 4 - $25,200 - not much more TSLA TSLA price fell from its all time high of $414.50 in November, 2021 to an intraday low of $101.81 on January 6th. That is a 75% decline from top to bottom, but incredulously, a recurring pattern for the shares. TSLA rose from $14.30 on Sep 25, 2019 to $64.50 on Feb 4, 2020, a gain of 345%, then it took just about six weeks to fall back to $23.37 (March 18th), a drop of 77% from its then all time high. Ouch....but thankfully, we were holding long term calls for most of that entire round trip and were still holding them at expiration on Jan 15, 2021 with TSLA at $275.39. TSLA 2019-2020 The point is that TSLA options provide stellar trading opportunities that allow for a unique margin of error if you get the major trend right. I don't believe the major trend is set yet, but if I am wrong there is plenty of upside potential to make up for later entries onto a leg higher to new all time highs above $414.50. If I am right, we will be buying new calls a lot closer to $100 than $200, making the trip above $400 and into the $500's a lot smoother. Note: Mar-Apr 2020 - a Fib retracement after initial leg up off the 23.39 low. TSLA - Weekly An almost perfect Fibonacci 78.6% deep Wave 2 retracement. Next: A post-earnings Fib retracement of the initial new leg up and don't be surprised if it is deep. We are already seeing an affinity for 75% retracements in how these shares trade, so make a mental note in the neighborhood of $120. Anything much below would require reassessment. TSLA Earnings - Spikes into earnings are common, as were retracements of those spikes. It is the nature of the this coming retracement that will either confirm, or nullify, the start of Wave (3) to new all time highs.
