Conditions are eerily similar to mid-August when I sent out a similar weekend update: Weight Of The Evidence (Aug 20, 2022). A Wave 2 retracement was extending mercilessly against index puts. a new round of which we had just entered the Friday before. SPX (from Aug 20, 2022) Current SPX 240 Between that next Monday and the lows of Oct 13th, the DJI fell 5,000 points, while SPX (above) fell from 4300 to 3500. That Friday before that published we had bought IWM puts in the Premium Service, QQQ Puts in the PRO Service. This Weekend's Message For all intents and purposes the retracement rallies in all major indices are complete at Friday's close. Any carryover into next week should be negligible, i.e., the patterns and Fib retracements have been fulfilled. The biggest difference between then (Aug 20) and now is that instead of a Wave 1 of 3, the market is on the precipice of a Wave 3 of 3, the drop should be significantly deeper and faster, the worst decline of the year, directly ahead. IWM 120 Minute This IWM 120 minute chart illustrates how price has retraced into the Fibonacci reversal area and still has not turned back down. There is room above for further rally, but any hard turn down, especially if price drops out of the shaded retracement zone, the probability escalates that the Wave 2 retracement rally has ended and a deep Wave 3 decline will be next. New Picks These are new recommendations suitable for new subscribers who want to participate in the coming Wave 3 down, or for anyone who has been stopped out of previous positions and/or may be underweighted on the down side for such a move. Aggressive: QQQ Nov 18th $275P (5.80-5.85) Standard: IWM Dec 16th $175P (4.45-4.50) Special Situation: UVXY Jan 20th $20C (0.65-0.75) (Link to discussion) Guest Chart: Courtesy Robert Prechter, Elliott Wave International
