That is how Robert Prechter described "Wave 3's" in his 1978 book, "The Elliott Wave Principle." That pretty much describes what we were met with as the market opened today. Many major brokerages are having log-in issues, among them Schwab, TD Ameritrade, Vanguard, E-Trade and Fidelity. There is, to sum it all up, panic in the air. Yep, feels like a Wave 3. QQQ The Q's opened on what is so far is close to the low of the day, 424.71 Being that it is in the early stages of a Wave 3, it is unlikely to have been "the" low for the move, but it does give some set-up perspective targets that we can monitor going forward. Despite the sharp bounce after the open, it still looks like 400-350 will be seen in this move, maybe sooner rather than later. SPY SPY opened near 510 and still projects 470 as an initial target for the opening five-wave sequence. Worst case scenarios could see SPY under 400 before the worst of it is over. It's still the first week of August, so we can still hone in on Sep 20th options expiration for rolling over into new strikes. Trade Management At this point, no panic is needed regarding our positions, as Sep puts in QQQ and SPY are performing as expected. Since these are both now deep in the money, thoughts turn to rolling over for some increased leverage and when doing so, let's take some profits along the way Sep 20th PRO Service Puts An hour or so after the Open, Monday. Rollover Candidates There is no compelling reason to do anything in a hurry right now. Half the brokers are having trouble even opening their platforms and we established initial positions well before this panic. As is typical in this kind of environment, the further out of the money options are seeing the higher percentage returns, but that is a double edged sword. If the current "bounce" off of the opening lows continues for more than a few hours, they will also see the higher percentage losses. Bottom line: Later today, tomorrow or even Wednesday could be just as good a time to roll into new strikes, so stand-by, pay attention and calmly stake out your next trade. PS: Especially for new subscribers - we always take some profits when rolling over huge gains..and yes, 600% in less than a month IS considered a huge gain.
