This trend model can be used to trade QQQQ options and if you are so inclined, gives a "worst-case"scenario for analyzing "best case" scenarios for gains in puts. The wave count is suggesting another 7-17% decline in store for the index. Extrapolating that to the QQQQ would suggest a drop to between 41-37 from its current level of 44.84. Let's take a look at the QQQQ chart and see how close it comes:
Wave 5 Target = 35-40
In conclusion, while the Daily Trend Model is SHORT, it doesn't give guidance as to how far or for how long the market will decline. EW is a imperfect science, but it does provide some structure for projections and in this case, is suggesting a decline taking the QQQQ to levels between 35-41. With four weeks to go to June expiration, there are a lot of strikes in the QQQQ puts that will thrive under the auspices of these projections.
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