- The 3rd wave down as labeled below had a big move down per unit time - very 3rd wavish.
- The wave labeled 4 below that followed the 3rd wave is an expanding triangle and triangles are supposed to be penultimate.
Bernanke has artificially taken fear out of the markets with his manipulations. He has effectively been using the power of the federal reserve (i.e. the quality of our money supply) as a means to naked short fear. Yes, that is an accurate description. But every naked short must cover some day and when they do it tends to be as a result of panic buying. In the case of VXX, it will literally mean panic buying. As the S+P collapses, market participants who have been using the fed for plunge protection insurance instead of buying puts will suddenly realize that the fed is a dead beat insurer. They will panic into put options in order to protect their fed begotten gains. This will cause VXX to skyrocket. Maybe not tomorrow, but soon enough.
No comments:
Post a Comment