A short but pithy update this weekend because coming up this week is volatility squared, FOMC meets on Wednesday, but about a quarter of the Nasdaq 100 (QQQ), including TSLA, reports earnings. Catalysts abound in the days ahead and I expect to be day-to-day on any new recommendations. In addition, two sectors that have been :"close, but no cigar," Bitcoin and Gold, remain attractive for new positions, but still lack the requisite triggers for high probability trades. We added HOOD on Friday, because its chart demanded it. Whatever comes from next week's wild news events will be the same, positions taken because charts demand it with the goal of exponential returns coming as soon as March monthly options expiration. Bonds & Interest Rates The first FOMC meeting of the new year is Tuesday and Wednesday and its not what they do, its what they say that could move the market, specifically Bonds and Interest Rates. We remain long TLT puts with the expectation of further erosion in TLT, and inversely higher interest rates. TLT TNX 10 Year US Treasury Yield Absent a surprise from the FOMC on Wednesday rates are turning higher, and bonds lower, over the next two months. Stocks TSLA Elon Musk made a big bet on Donald Trump going into the election and as a result, TSLA shares soared from $250 on Nov 5th to a high of $488 on Dec 18th. That's a gain of 95%. TSLA is sitting at $407 this weekend before release of 4th quarter 2024 earnings, a retracement of 34% of that post-election gain, very close to a Fibonacci 38%. Close enough for an earnings rally, or, is more correction ahead? We will take our cue, not from a knee-jerk reaction after-hours on Wednesday, but on how TSLA settles out next week. Going into earnings, I'm erring on the side of holding TSLL calls, but not nearly as many as I may be holding a week from now. To be continued. TSLL Huge potential to the upside on both charts, but also marginal potential for further downside represented by the shaded Fibonacci rectangles. Hey, if this was easy, everyone would be doing it..and I'd be chasing ambulances. Hey, maybe everyone is doing it: From X Saturday morning, one bullish traders view of TSLA's post earnings potential: QQQ This may the most important chart of the week, insofar as so many of its largest components are reporting this week, including AAPL, TSLA, MSFT and META. This wave count is my worst case scenario pattern, it implies a third wave down due to begin in the days ahead. The only applicable Elliott Wave rule for Wave 2 is that it cannot retrace 100% of Wave 1, i.e., QQQ cannot rise above 539.15, which is just 10 points above Friday's close. On the other side of the ledger, it would take a break below 500 to confirm the bearish count shown above. Pick your poison. IWM This is what keeps me leaning bearish: A much more persuasive bearish Wave 2, topping out after a perfect Fibonacci 50% retracement of Wave 1 down and now ready to turn down hard. Yes, it could rise to 62% as shown in the chart, but it could also drop like a rock from current levels. FOMC and big cap earnings may have a say on what it does next. Two Wave 4's - With Question Marks Gold Bitcoin Active Options PRO Service Premium Service
