This is not the subject I had in mind for this weekend, but trading on Friday has placed it front and center, at least for the next few days. The Big Picture (1) After a long, hot summer the market has finally reached September, the seasonally weakest month of the year. (2) The S&P 500 closed Friday down 20 points, no biggie, eh? I beg to differ. SPX started out Friday +30 points and 30 minutes after the open was in free fall. It dropped from a high of 6,532 to a low of 6,444, a drop of 88 points, or approximately 1.3%, i.e., a stealth intraday mini-crash, equivalent of a 600 pt DJIA decline. Below, a 10 minute SPX chart to highlight that decline: SPX Intraday 10 Minute Chart Steep decline (Wave 1) followed by typical Fibonacci 38-50% retracement (Wave 2). Wave 3 down next? (3) NVDA, the darling of the Nasdaq bull market, broke down on Friday, taking out support. NVDA Daily NVDA stumbled, but Nasdaq held up...but for how long? QQQ Daily At first blush, this QQQ chart looks fine, as price fell out of its intermediate term channel on Sep 2nd, but quickly recovered to close the week solidly back inside the uptrend. Not so fast, all it would take is another close below the channel and we are buying QQQ puts. That channel comes in Monday around 570 and if intraday that level is threatened, look for a Special QQQ trade alert. The Bullish Take One trade does stand out and we covered it last week: TSLA. Share price sneaked above $350 on Friday, hitting $355.87 and then closing the day at $350.84. A new high above $355.87 and we have to get pound the table bullish for two price levels, the current all time high of $488.54 and the indicated Wave 5 high above $700. There isn't another "add-on" breakout level until that all time high, so a break above Friday's high tick is our last chance to buy more TSLA/TSLL calls until close to $500. TSLA It usually takes more than two hits of a trendline for a breakout to be meaningful. Note how the indicated breakout on May 12th @ $295 was the fourth hit of that descending trendline. Nonetheless, a new high above Friday's high print of $355.87 will be confirmation enough for a run to new all time highs...and beyond. Conclusion For all of the Big Picture reasons set out above, I am on the look out to add a tranche of QQQ puts to take advantage of an upcoming, and possibly steep, market decline. If I am wrong and instead, a new leg up is about to unfold, top of my list for more calls is TSLA/TSLL. If so, we will be swinging for the fences on this one. Active Trades Top Performing Premium Trade From June 12, 2025 PRO Service Premium Service
