The stock market showed its hand this week, closing at or below it's lowest prices since late June. The Trend Models are all on Sells and pattern recognition is forecasting third waves down at multiple degrees of trend. Along with those bearish markers is the September-October seasonal crash cycle that is casting an ominous shadow on every major index we follow. It is a time to get aggressive on the short side, especially if downside momentum picks up into the end of this month. Stay on top of my updates and be alert to any new trades that are posted, starting with the VIX trigger discussed below. Trade Management - Current Third Wave Down Exposure These are recent bear market trades with open expirations from our two trading services. Any Premium Service subscribers interested in upgrading to PRO can do so online via your account settings (preferred), or send an email to service@bluelinetradingsystem.com. Premium Service PRO Service CHARTS: Third Waves DOWN at Multiple Degrees of Trend DJI Daily Year long trend line successfully tested six times, but broken down on #7 with a breakaway gap, Sep 21st. DJI 30 Minute SPY Weekly An almost year long counter trend Primary Trend Wave 2 has finally ended, with Wave 3 breaking down toward SPY 300 into the 4th qtr of 2023 and probably well into at least the first qtr 2024....maybe longer. QQQ Daily Pattern across all indices is identical: Third waves at multiple degrees of trend. IWM Daily IWM has been our best directional trade in the PRO Service, with Oct puts +180% since August 4th, but the best downside action is still ahead. If there is another counter-trend Wave 2 ahead, sell it. New Trade - Pending VIX A breakout above the year long declining parallel trend channel (mouthful) will coincide with a blue bullish trend model Buy Signal and will trigger both the PRO and Premium Services into Oct and/or Nov VIX call positions. An Intraday Alert will go out to each service if trade is triggered. If not out of the gate on Monday, better chance by mid-week. October 18th Calls Nov 15th Calls We are looking for the character statement out of this market, one in which fear, uncertainty and panic take over as the overriding sentiment, propelling the highlighted calls in these tables up 10X, minimum. The sooner, the better, but it may take a couple stabs to get this one right. It WILL be worth it. TSLA - Short-Term Sell Price weakness last week was enough to generate Trend Model Sell Signal by Friday's close. Historically, this has meant standing aside until the next Buy Signal which is likely due around next earnings report due out Oct 18th. The potential is for a drop into the low 200's, possibly breaking the long term channel for a few days. Two million pre-orders for Cybertruck suggest the next blue up arrow will be an excellent call buying opportunity, no matter when or where it is triggered. Expiration and new strikes to be determined.
