The Big Picture The IWM Apr 14th $200P was purchased on March 18th and is sitting at -64% as of this weekend. Anyone using a 50% trailing stop is technically out, either by using the trailing stop (-16.5%) or a static stop @ -50%. If not using any stop the position is only worth 36% of where it started. Should the next few weeks be hard down, or even just moderately down, option traders will want a decent sized position in index puts. What "decent sized" means is up to the individual, no one knows your risk:reward profile better than you. This is one instance where adding more as the downside momentum picks up makes strategic sense. See last week's lows, set out below, for natural levels to increase size of downside bets. The IWM Apr $200P is still well positioned, even at -64%, albeit on the aggressive side being so far out of the money with two weeks to go. A more conservative choice would be the IWM April 14th $210P (4.90-4.95), or the IWM May 20th $200P (4.50-4.60). My own portfolio has some of each, April and May. IWM Daily - Set-Up for A Barn Burner The 1-2, 1-2 labeling best fits the pattern of decline, although a close second is the Dow wave count: DJIA - Alternative count, but just as dangerous QQQ - Wave 3 down begins after 61.8% Fib retracement of Wave 1 IWM, QQQ, DJIA: all the price patterns are consistent with a powerful down leg due at any time. By any time, it could start Monday or a week from Monday, or a week from a week from Monday. The price patterns say it's closer rather than further away. The April 14th monthly expiration is cutting it very close, so we will be taking this day-by-day starting next week. In any case, if the major indices/ETF's break below last week's lows, best to add positions to the short side. Last Week's Lows DJIA = 34,538 IWM = 203.03 QQQ = 358.07 TSLA The high close for TSLA was 1199.78 on Jan 3, 2022. Last week's high daily close was Tuesday @ 1099.57. This Fibonacci price extension chart is projecting 1360, 1900, then 2600 in the next 12-24 months. If the big picture market decline set out in the above index charts comes to fruition, new TSLA highs will be delayed. If there is no such decline and the stock market roars higher into the summer, out-of-the-money TSLA calls will be on their way up 10X by mid-to-late 2023. Eyes on the prize: TSLA calls are going up 10X, this year, next year, or in 2024. either straight up, or after another test of the $700's coincident with a hard down stock market into the summer. Either way, we will be ready. TSLA w/Fib Price Target Zones
