In the last post I made on DRYS I modeled that the downward wave in progress at the time was over, suspecting that it was the completion of Wave 2. Check out the chart in that link: My EW model called the reversal with excellent accuracy. Now I'm trying to determine if we are really building wave 3 up OR if the nice percentage rally we just saw here was really only the B of 2. If that is the case, this will turn downward in the next day or two very hard. The reason for this is that in that case it will be forming 3 of C. Maybe it will be 3 of 1 of C. Maybe it will extend and become 3 of 3 of C. Either way, it would involve gaps down that the prudent trader would rather avoid.
There is also the chance that it will go up into a real C wave from here. Initial confirmation of this will be a breakout above the recent high marked "b? in the model below. The chart could go either way at this point depending on how a butterfly flaps its wings in Japan. But since I think the VIX is ready to turn around and start showing some fear, I will go 70:30 against this being the 3rd wave up. In other word, I think the next move should be downward to somewhere around the lower red 2?
Time will tell.
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