There are only two ways to trade the current war arena in Eastern Europe: Either guess the next 2 or 3 news headlines to affect the stock market, or, stay true to the price pattern based trading decisions and disregard fundamental/geopolitical inputs - beyond anecdotal observation. I will focus entirely on the latter, because like everyone else, I have no clue on the former. It helps that those price patterns have kept the trades virtually entirely on the short side of the market and but for our TSLA calls, that has been the correct stance. Both PRO and Premium portfolios have been populated with alternative index puts and volatility calls since January. We have ventured into Covid stock to collapse with puts in MRNA and PFE, a stellar Sell in GM (Pro Service) and dipping our toes in oil with USO back in January and OXY on Friday. Finally, the DJIA chart down the page sets out a, "worst case scenario," for next week. With the market being buoyed back and forth with news from the front, good and bad, it is for now just a "set-up." We should know by this time next week if worst is over...or just beginning. USO - Buy Jan 14th @ $59; Target $70 OXY MRNA DJI - Worst Case Scenario - Wave 3 of 3 Down Begins VXX - Inverse of DJIA: Wave 3 of 3 Up In Volatility Bitcoin - Why Is BTC Not Going Up? GM (Pro Service Sell Mid-Jan) TSLA (See note below) Look for a break above trendline before even thinking of buying more calls. On the bullish side, stock price keeps hanging above the 38.2% Fib retracement level ($770) as though its done going down. The Mar-Jun-Sep 2023 calls look cheap as implied volatility is being squeezed out price and all of which are setting up for 5X-10X returns once uptrend resumes. ONE LAST CHART: S&P 500 This SPX chart is very similar to the DJIA "worst case" chart posted above. The count illustrated here is easy to follow, either the bottom falls out on the Open on Monday, or, one more rally for new (c) top above 4400, then the bottom falls out.
