Friday SPX closed on its low of the day, week, month, quarter, as well as a new 2022 bottom tick (3584.13). Yet, Wave 3 is still only just beginning. In Elliott Wave terminology, it is unfolding in, "multiple degrees of trend." It suggests a scary market meltdown dead ahead. In graphical illustration, QQQ sets the tone: QQQ - Wave 3 Decline At Multiple Degrees of Trend *Shaded squares are short-term Fibonacci reversal areas What comes next is the month of October, the 4th Quarter and final drive to the lows of 2022. Within the next 4 weeks will be the climatic frenzy that will place a series of Wave 3's at multiple degrees of trend across all of our stock index charts. Volatility should explode. Dollars & Cents Premium Service Option Positions Pro Service Option Positions Included in the tables above is the closed out Sep 16th puts for IWM (Premium Service) and QQQ (PRO Service). Somehow leaving off a two of our major stock index option positions, one +387% and the other +231%, did a disservice to just how profitable this "Wave 3 Down" market has been for this option service over the summer months. As illustration, if those gains were all rolled over from the Sep 16th expirations into the Oct 21st expirations, the gains would look like this: PRO Service: QQQ (rolling Sep gains to Oct position) = +1,026%* Premium Service: IWM (rolling Sep gains to Oct position) = +726%* *Does not account for periodic rolling up price strikes, nor banking some of the gains along the way, and, as always, past performance is not a guarantee of future results. IYR We are on our second round of IYR puts, the first being the Sep 16th $100P bought on May 3rd, those then rolled into the Nov 18th $90P on Sep 16th. The gains combine for a 246% total return to date: We were expecting mid-70's by Sep expiration, but look to have been a month early on the timing. Much lower prices are indicated for IYR into Oct 21st - Nov 18th, as real estate (and crypto) could be the next leaders to the downside. This IYR put trade has now more than tripled since May 3rd and is likely to triple again by Nov 18th expiration. UVXY Fibonacci Extension Projections There are three weeks remaining in the Oct 21st UVXY calls, purchased in both the Blue Line Premium and Blue Line PRO Services on Sep 16th, pursuant to roll-over instructions from expiration of Sep 16th UVXY calls. Assuming an acceleration of the Wave 3 meltdown expected in the immediate weeks ahead, a more leveraged play is recommended for at least part of this position. With the Fibonacci extension tool suggesting a target price range between $15-$25 to Oct 21st, the most attractive strikes, in order, are $12, $15, $20. If UVXY can exceed $25 before expiration, most of the calls below with strikes above $15 will be up at least 10X. Alternatively, with the $10C already up 121% in its first two weeks with there weeks to go, maybe just leave well enough alone and stand pat. If UVXY closes at expiration just where it is today, $12.84, those $10 calls are still up 100%, while any strikes above $13 would expire worthless. UVXY Oct 21st Calls - Friday's Close One Last Chart LQD is the Investment Grade Corporate Bond ETF, what has for decades been equated with the "smart money" deep pocketed investors and institutions. It is now broken down below a 15 year trend channel and appears destined to test its 2008-2009 lows. Note how easily it sliced through to its "Covid Crash" lows, which then provided only token (a-b-c) support for the July-August counter-trend rally. I just wrote above that real estate (and crypto) may be leading the next leg down, let me amend that to include, "smart money," as well. 'Big Short' investor Michael Burry sounds the alarm on shaky markets - and fears a worse disaster than the financial crisis
