Another look at VXX

Like gold and silver I have been on VXX bottoming watch.  The potential cup with handle I mentioned in this post morphed into a horizontal triangle with 5 clear rail bumps before breaking down.  Since then we have seen what could easily be modeled as 5 waves down.  It might only be 4 waves but I don't think so for 2 reasons:

1. The 3rd wave down as labeled below had a big move down per unit time - very 3rd wavish.
2. The wave labeled 4 below that followed the 3rd wave is an expanding triangle and triangles are supposed to be penultimate.

So I think there are two possible models to follow but that the upper blue line is the higher probability of the two.  I would definitely watch that top blue line as a primary model.  The bet here is simple: put some money into this with a very tight stop.  If it goes lower than the first 5 then you sell for a miniscule loss and wait for the 2nd blue line to play out.  But if it doesn't break down and instead breaks the top green resistance line then hold onto your hat because VXX is a coiled spring. 

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.