Volatility Calling This weekend's highlighted chart is VIX and a January-March pattern that demands attention. The trigger will be a 10% VIX rally above 20, or a gap-up open of 5% or better in the coming days. In either of these instances, check website immediately for fresh call recommendations. VIX I'll be recommending an option in the trading service in either VIX or UVXY some time next week, as soon as we get VIX back above $20 (closed Friday at $19.85) for good. In the stock indices, Wave 3 down at multiple degrees of trend should be accompanied by a spike in volatility similar to what we had in Jan-Mar 2020, at which time VIX was thrust into the $80's. ------------------------------- DJI DJI broke down below its Key Level last week and finished Friday just underneath. If it pushes back above next week it will serve to delay, but not alter, the next leg down across all indices. A Fibonacci retracement of 38-62% back above the Key Level, then falling back below 33,400 would all but confirm the next leg down well below 30,000. SPX The two Key Levels on this S&P chart above will trigger new put positions and will likely correspond with the aforementioned new VIX calls, providing ample leverage for the long awaited Wave 3 down at multiple degrees of trend. Counter-trend rallies in Bonds, Bitcoin, TSLA and even Gold is stirring a lot of bullish sentiment, just as it always does near tops of major significance. Next leg down will be a whopper. QQQ IWM Bitcoin - Expect reversal at area of previous Wave 4 top = $25K TSLA TSLA earnings due out Wednesday after the close. The shares are up 30% off of the late December low and rally into earnings followed by sharp sell-off has been reliable short-term pattern. Bigger LEAPS trade for the long term is still pending, looking for a re-test of $100 on the way to new all time highs by 2025. Interest Rates Interest rates have been rising steadily since the middle of 2020. The stock indices started taking note about a year later and are playing catch-up...to the downside. An oversimplification, for sure, but also the key for a long term fundamental reason to expect recession or worse in the months ahead. If rates tick up next few weeks off of the rising trend line, look out below (stocks).
