The next leg down has started and it is in all probability it's the unfolding of multiple degrees of third waves down. It should be immediate, powerful and leave no doubt in the financial community that there is a new sheriff in town. IWM 2h Lots of "stuff" going on in this IWM 120 minute chart, starting with the Big Picture wave count that suggesting a deep dive Wave 3 unfolding directly ahead in what could be a near vertical drop. The Fibonacci reversal zones are easier to draw than to trade, but what has been consistent with this pattern recognition technique has not been knowing how high the counter-trend rallies will reach, but knowing when they have ended. As price exits the shaded squares to the downside, it has been safe to assume that the prior retracement rally has ended and a new leg down has begun. i.e., buy more puts. It worked on each one of the shown examples on this chart, with the the exception of the current one, which we can only consider in progress. We will know soon enough if this one worked too, and as of the close on Friday, so far so good. DJI 2h The DJI closed Friday just 530 points above its Sep 30th Wave 1 low. When it gets left in the rear view mirror expect a waterfall decline over several days that could culminate in headline news and/or trading halts. Nothing less should be expected from Wave 3's of multiple degrees of trend. IYR 2h Our IYR Nov 18th $90P Puts closed @ top tick on Friday. New purchases should look at Nov 18th $80P ($4.00). UVXY 30 minute UVXY meandering higher, but we are looking for spiking higher before we're done trading calls. The tracking table still tracks the original $10C, but aggressive traders should be rolling up to the $12 for Oct 21st expiration, and as high as the $15C for Nov 18th expiration. Some of all three might be the best bet. TSLA Intermediate-Long Term TSLA is not done correcting, nor should it be in the midst of Wave 3 down of multiple degrees in the macro big picture. The next bet will be when does TSLA hit a new all time high (above $414.50), 2023, or 2024? To be continued. Smart Money Breakdown The LQD "Smart Money" chart is updated from last weekend. Ugly is an understatement as it may be the most telling sign of all that there is trouble ahead for the economy, stocks and bonds. Nothing financial begins to heal until this one turns up.
