The robust bear market rally of last week is about to get returned to sender, i.e., turning back down into the next leg of this year-long bear market. The charts below of the S&P and IWM show a near perfect 61.8% Fibonacci retracement of the prior Wave 1 down and although some marginal strength beyond Friday's highs is possible, the overwhelming odds now favor reversals back down. Remember, there is no way that multiple degrees of third waves down are going to be accompanied by the crowd tagging along. Thursday, sparked by a near record inflation number - just a tad lower than expected - that at any other time in the past 5 years would send the market down 1200 points instead of up. Nonetheless, the bears were punished and vanquished, the crowd dispersed, and only the faithful still on board for the meltdown ahead. IWM SPX QQQ There may still be one or two days to add to short positions early next week, or at a minimum to move capital from Nov expiration to Dec/Jan expiration, or maybe not. Bitcoin Bitcoin looks bad, surrounded by bad news and broken fundamentals, and what was once worth pennies on the dollar may be headed back to its origins. Despite the stock market coming back on Thursday and Friday, Bitcoin looks fragile and dangerous. Its next leg down may be the spark to take "every damn thing else" down with it. We got off of this train wreck about a year ago with a trend model Sell Signal on Nov 22nd and have never had a chart pattern to get back involved. We thought the $30'000's would hold back in May, but it kept going down: Weekend Update May 25, 2022: "Above or below $30K Bitcoin will tell the tale of global finance this summer. Above $30,000 suggests recovery across all asset classes and below $30K spells doom and a rash of worst case scenarios. While our markets are closed this coming holiday weekend, Bitcoin will be open and will give a heads-up of what to expect come Tuesday morning." Needless to say, Bitcoin never got back into the 30,000's and neither the PRO nor the Premium services got back Long Bitcoin. It's trading this morning just under $17,000 and looks to be headed below $10,000 before any meaningful bounce can occur. A drop below $15K in Bitcoin could take stocks, bonds, gold and silver with it to the downside, a, "Wave 3 down at multiple degrees of trend" needs to trigger. Bitcoin is the only asset that hasn't gone ballistic on last Thursday's inflation read. Special Situation Update: AVXL AVXL was recommended as a Long Term B&H idea back in July. If their Alzheimer drug works, it won't matter what stocks, bonds, Bitcoin or anything else is doing, the stock will be way, way up. AVXL July 16, 2022 AVXL Current AVXL will be presenting results from a phase 3 trial of its Alzheimer's drug, blarcamesine, at the CTAD conference in San Francisco on Dec 1st. If the results are good enough the FDA should grant blarcamesine accelerated approval and send the stock soaring. For the next two weeks, AVXL is a bet on a positive presentation at the conference. My source for this pick is now retired from the business, but he spend his entire career finding speculative opportunities like AVXL just in front of positive news catalysts and now the stock is breaking out two weeks before the event. Buy strength. Target $30
