"Markets can get volatile around this time of year. The Russell 2000 index peaked on November 8, 2021 and declined 14% to December 20, 2021. Next Tuesday, November 22, is the one-year anniversary of the top in the NASDAQ indexes and the start of the bear market. As recently as 2018, the DJIA rallied strongly from November 23 to December 3 and then plunged more than 16% to December 26, 2018. In 2015, the DJIA made a November high and declined 14% into mid-January. And in 2002, the DJIA made a countertrend rally high on December 2, 2002 and declined 18% to March 2003. There is a positive seasonal bias into the first few days of December but that dissipates thereafter." -Courtesy Elliott Wave International ------- This update includes a slew of charts and indicators that in the aggregate make a compelling case for a major top imminent from current levels. Added to pattern recognition and Elliott Wave analysis, the downside reward from index ETF puts is staggering. I will also be watching VIX/VXX/UVXY closely as volatility is at levels from which massive spikes erupt about every two years. Last one: Covid Crash lows of 2020 that saw UVXY explode 13X. Trade Management The next slew of trading signals should all be on the downside as key levels get taken out, one index/ETF at a time. If the market meanders or drifts higher it will only be limited to marginal new highs and not longer than a week or two at best. Although that leaves the Dec 16 expiration as still viable, new positions for intermediate term traders should be going out mostly to Jan 20, 2023 unless otherwise recommended by upcoming Alerts. New Trade: If QQQ takes out 280.00 on any close, add: Jan 20th QQQ $260P (4.70-4.75) Target: $45+ (see analysis under Sentiment Indicators: CNN Fear & Greed Index) Stop: -50% QQQ Daily With YTD Fear & Greed Top Signals QQQ - Wave 3 Down @ multiple degrees of trend QQQ 2 hour TRADABLE SENTIMENT INDICATORS Year-to-Date major peaks in all of the above sentiment indicators were Jan 3, April 4, August 16 and November 18 (i.e., NOW!). Each of those prior peaks marked the beginning of significant declines in the stock market. The previous signal of Aug 16 saw QQQ drop from 334 to 262 in about six weeks. A like drop now will see it drop from currently 285 to 225. The Jan 20 2023 $260P would then be trading north of $40, close to a 10X increase. Other stock market indices-ETF's and their options should show like performance. The S&P Oscillator peaked in early November and has a long way to drop before the market can be anywhere near a bottom. Next dynamic move expected: acceleration into spike low around mid-to-late December.
