This chart should be viewed in junction with the QQQ chart posted last weekend, updated below. I'm also including at fair use DSI/SPX chart from EWI to provide some context and emphasize how important a juncture we are at in the markets. The case being made in our paid subscription service is for a Wave 3 down at multiple degrees of trend. It's laid out in more detail there, but these three charts simplify and summarize the narrative. Nothing happens until key levels are taken out in the Dow, S&P and Nasdaq, but when they do all hell should break loose and if it does, you don't want to miss it.
VIX Cycle Low Forming
QQQ Wave 3 at Multiple Degrees of Trend
Fair Use Chart Courtesy EWI
Trade of The Week
IYR is one of the most consistently profitable trading models in our arsenal. One of the reasons is that the options are cheap, making them good strategic bets on market direction. In our Wave 3 at multiple degrees of trend hypothesis IYR should be trading below $75 by mid-January and could drop as low as mid-$50's by March. The Jan 20th $85P is trading at 1.70, while the Mar 17th $80P is also trading at 1.70. These should both be in the money a minimum of $10 by their respective expiration. The latter could be worth $25 by March. That equates to over a 5X increase in the January position, and over a 13X increase in the March position, both being essentially buy-and-hold strategies supported by nothing more than a bet on a continuation of a bear market as Wave 3 unfolds across all economic sectors, including U.S. Real Estate.
IYR - Intermediate Term Trading Model
U.S. Home Prices
