As if to salute the October 19 Black Monday crash 38 years ago in 1987, we got mini crashes on Tuesday Oct 21, 2025.
Interestingly on the Sq of 9 Wheel 38 is opposite October 21.
But in keeping with what WD Gann said, “It’s always the week of”.
The steep advance in the market from September to January 2017 was notable for the absence of volatility.
It was free money for speculators selling out of the money puts.
There’s always a day of reckoning in the land of free lunches.
Volmageddon hit in late January 2018.
It perpetuated a two year Megaphone Top that ended in February/March 2020 with the Covid Crash.
Likewise the recent run in gold and silver to record highs invited naked put selling.
Many players likely assumed that last Friday’s key reversal would mirror the October 9th reversal which was followed by the steepest leg of the rally— the champagne one week blow-off into last Thursday producing Friday’s Key Reversal Day.
Tuesday was a rude awakening.
Gold and silver gapped down and kept on going taking the momentum trade in stocks with it.
With the metals buckling, investors on margin had to sell what they could.
As well, the rug pull in the metals didn’t fall on deaf ears for those chasing momentum stocks. Many glamours got hit indiscriminately yesterday.
OKLO
MP
NBIS
IREN
ASTS
GRAL
….to mention a few.
Remarkably the blood -letting played out with a green SPX and the Q’s barely down.
If you were strictly an index player you wouldn’t have known there was blood on the tape.
In sum, IF the momentum stocks find pullback buyers it won’t be hard to imagine a run to 7000 into our November cycle.
Monday’s rally in GLD proved to be one diabolical Paws Day.
A “first mouse gets the squeeze, the second mouse gets the cheese” for the ages.
In other words, the first sell signal, Friday, squeezed those who took the sell signal, while the huge gap down on Tuesday got the cheese.
GLD peaked at 403.
90 degrees down is 383. The drive below 383 opened the down door to 180 degrees down at 363.
363 aligns with October 30.
363 ties to an undercut of the 20 DMA which has not been tested since the late August breakout.
A drop to a minimum of 363 is a strong likelihood to play out by the end of October.
We may get there more quickly and then come back to test it near Oct 31.
Alternatively breakage below 363 opens door to 345 which also squares Oct 31.
345 ties to the 50 DMA.
A precious Trick or Treat is on deck.
The two year Megaphone Top starting in January 2018 produced 2 years of intense volatility.
Currently the NAZ has carved out an 18 month Megaphone Top
Notice the Distribution Box prior to the spring crash in 2025 and the current Distribution Box.
The point is Point 5 of the Megaphone is ending.
2026 will be nasty.