The Big Picture The Tiger King, has 35 million views on Netflix (that's about 1/10 of the US population). A train wreck is a train wreck, you just can't look away, as we will see with the next market leg down, a Wave 3 taking out the March 23rd lows, The price pattern labeled below on the DIA and IWM charts has three potential outcomes. First, the analysis can be off target by a degree, meaning both DIA and IWM are not yet ready to resume their declines and will rise to higher Fibonacci retracements, 61.8% for DIA and 50% for IWM. Second, that the analysis set out on the charts below is just plain wrong, the bear market is over and its smooth sailing from here. The probability of either of these two outcomes is low, the former having a slight edge over the latter. Elliott Wave Analysis The highest probability, based upon an array cyclic, fundamental and pattern recognition analysis, is that early this coming week will see the completion of Wave C of 2. This is classic Elliott Wave analysis, the big gun that I bring out only when there is a compelling pattern unfolding, "compelling" meaning too perfect a pattern to ignore. It forecasts a massive market wave 3 decline imminent that at a minimum takes out the March 23rd lows. In this scenario, the gains that were achieved in stock and index puts, as well as VXX calls in the first sixty days of 2020 will pale in comparison to the gains that will be seen on same in the next sixty days. Intermediate Term Trade Performance - First 60 days of 2020 If you believe in Elliott Wave pattern recognition than this is the pattern that you go all-in on. That is not a guarantee, it is simply the probabilities are stacked in the favor of a short trade on any inkling of downside momentum. That is how we are prepared to play on Monday and if necessary into Tuesday. The big cat is in the ring.
