Pattern recognition is an umbrella term for our trading set-ups. Elliott Wave analysis is one of those patterns that is useful in identifying big moves up or down, or in Elliott terms, Wave 3 (and sometimes, Wave C). As of Friday's close the Elliott Wave counts shown on the stock index charts below share the same interpretation, that a Wave 3 down is underway. The caveat is that neither Elliott Wave nor any other form of pattern recognition trading is perfect in forecasting price movement, although in some cases, like those set out below, they do give rise to compelling probabilities. The overwhelming weight of evidence is that a significant drop in the markets has begun and the deepest, fastest and most profitable part of the drop is still ahead. Whether it be Monday, or a week from Monday, the shared pattern set out in the charts below conclude that such a move is imminent. DJIA Intermediate Term S&P 500 Intermediate Term QQQ Intermediate Term IWM Intermediate Term UVXY Short Term The UVXY Buy in the Premium Service on April 11 was technically stopped out a day later. The PRO Service got back in late Thursday with a fresh short-term Buy. The Premium Service trading table below reflects what would have happened if the Premium trade was not stopped, i.e., a gain of 62.50%. That's why stops on volatility can be dangerous. I would rather invest less capital on an UVXY position and hold without a stop. Premium Trades The "Best Return" column on the table reflects the highest price and return achieved since trade entry, while the "Current Return" column reflects a simple buy and hold calculation without regard to any trade management, profit taking or stops. PRO Trades
