The Big Picture "Toto, I've a feeling we're not in Kansas anymore." The market ("DOW") reversed nearly 3,000 points on Friday to close at its high of the day, coincident with the President's press conference on steps being taken to manage the coronavirus outbreak, on both the medical and economic fronts. This is a news-driven market on its face, but underneath there is a trend and that trend has been down since mid-February. As is evident on the chart below, we are not in Kansas anymore. The breakdown out the five-year uptrend channel was decisive, with a new intraday lows measured from the Dec 2018 bottom. When Friday's low at 21,285 gets breached it will be, "all-in on the short side." That is about 2,000 points lower than Friday's close, a distance that these days should only take about a day and a half to reach. The Weekly Stochastic Buy Signal I described this pattern recognition set-up in my Feb 19th YouTube video, which was highlighted and linked in the Feb 29th "Leap Day Update." Here is the same chart, updated as of Friday's close: There have been three weekly price candles and the VXX Stochastic is now knocking on the door of overbought. In three of the four prior signals the stochastic reached overbought in just three weekly bars, while the signal in October 2018 took 12 weekly bars to get there. If the indicator is going to reach into overbought levels it will take few more weekly bars, which means VXX can still go higher on this run. On the other hand, VXX 23 to 49 is one heck of a trade. The March $15 call bought at $1.25 on February 21st reached as high as $33.00 on Friday. Anyone still holding this one? I didn't think so. My most frequently asked question on both the Tesla and VXX run-ups has been how to re-enter positions that were exited way too early. Tesla At its low for the week TSLA fell almost all the way to its Fibonacci 61.8% retracement level. Who would have thought that possible just a few weeks ago in the 800's? I'm adding more shares down here. No stop, i.e. it's the proverbial Buy & Hold. ARK Invest When Tesla was running up above $800-900 ARK Invest was selling shares, it had to sell its positions down to less than 10% of their portfolios. This is the second week in a row where they are now buying it back. They are relentless in their bullishness...as am I. Trading Tables A different look this weekend. We have added a column that tracks the option's price without regard to any stop, from entry to expiration. The shaded five columns: "Current Price, Current Return" tracks prices without stops, then Date the 50% stop hit (if at all), followed by the 50% Price and Return based upon that stop. Too much information? In markets like this stops may not be necessarily the best way to trade these signals. Right now most Current Returns, those trades without stops are excelling, and in a big way. Premium Trades Examples: (1) VXX Buy Signal Feb 21st - Mar $15C. Currently it is up 2135.20%. If it were to get stopped out next week (price hits 16.50) the gain would be 1220%. (2) TSLA Buy Signal of Dec 9 - Jan 2021 $420C. Currently up 451.25%, but if the 50% trailing stop strategy was used, it would have been sold on Feb 28th for a 668.98% gain. Premium Trades With Still Open Expirations PRO Trades With Still Open Expirations
