...of chart breakdowns is signaling the annual September-October crash window is officially open. "Crash" isn't word we have used since early 2020, but it's back on our radar this weekend. Subscribers to the two Blue Line paid trading services, PRO and Premium, already have already received the first of our heads-up trades going into this window.
SHOW and TELL
The TELL part is that there are an across the broad spectrum of stocks and indexes virtually identical chart patterns. This is something we saw in February, 2020. The result was a 33% in four weeks dive into late March. This was called the "Covid Crash." It started with a single red candle, one not unlike we saw on Friday's close.
We covered what is going to happen next here and here. If this analysis is right, or even close to right, the next month will be a jubilee for those long VXX calls and almost any index and/or stock put.
The SHOW part is an illustration of what we were doing going into the Crash Window of 2020. If the market is headed sharply lower over the next six weeks, this is about what can be expected by selective positioning:
Blue Line PRO - Top 25 Trades Going Into Covid Crash
Blue Line Premium - ALL Trades Going Into Covid Crash
Notes: (1) The trades in the above tables are the actual trades sent out and posted for subscribers in the weeks leading into the Feb 2020 top; (2) "Maximum Return" means just that, the highest the return was on the designated option prior to expiration. It does not mean that amount was realized, that is a function of exit strategies which we discussed in daily updates through that period; (3) Past performance is not a guarantee of future results.
Charts In Support Of a Major Top
This S&P Intermediate Term is the most bearish chart of the lot. On Friday it triggered an Intermediate Term Sell Signal while at the same time breaking down through a rising trend line up from the late 2020 lows.
It's counterpart in the DJIA broke its intermediate term trend line a week ago and is already down about 1,000 points from its August 16th top:
QQQ signaled an Intermediate Term Sell on Friday's close sitting right on a six-month rising trend line. This too shall fall.
A 240 minute VXX Buy Signal:
VXX 5-minute running up right into the close on Friday. This is the one I'll be glued to on Monday, and/or Tuesday. VXX calls have 4-figure potential:
Where the FANG's go, the market will follow:
Nasty looking short-term EEM:
Another FANG stock leading the way down:
Speaking of leading the way down, the Russell 2000 topped on March 15th and is poised for a new leg lower, coinciding with the other indexes finally getting the message:
ROKU is typical of dozens of stocks that have already broken down and are well on their way to...who knows where? Note on the tables above how many of the great, great trades were with individual stocks. The largest gainers or the past two years are in very weak, slippery hands.