This is a short term trade setup for TQQQ based on the 30 day 1 minute chart. Potential upside on the targeted buy area is as much as 5-6 points or 6% in a matter of a couple days(!) or even 15%(!)
Best case scenario: Gap down downward 3 completes at 1.618 right to 106-108 range. Buying in that range is in anticipation of an upward 382 W4, in this case, if there’s a bounce from 106, back to 112, or 108 back to 114. You’re betting there’s no 2.618 wave 3 which is pretty rare (2.618 happens 10%-15% of the time), and betting that 1.618 is complete for an upward 4. Even better scenario is that that was the bottom, period. We’d go all the way back to a 786 reversal over the top of the B to 122 or 126 the all time high.
Worst case scenario: You run into the rare 2.618 would be another 10 points of downside from the 106-108 range…but the VIX is right at the magic 21-23 range right now and with the gap down tomorrow we’ll hit that and those levels.
Where I’m leaning: Great buy to buy the TQQQ in the 106-108 range as there’s an 80% chance it reverses in at least a 4 to the 112-114 range.
