Tomorrow is crunch day for the markets.

Check out the model that I posted here, especially the right hand side of it (the one that I think will play out).   Now have a look at today's $COMPX action as shown below.  First, the red lines were what I drew last night.  So they were all in place before today's trading action.  Check out how "2 of 3" is hard to read.  This is not because I was lazy to fix it after I put it too close to the graph.  This is because I put it there last night and the chart over wrote it.

In short the chart is now set up for a perfect 3rd of 3rd down, a gap down crash.  It might not happen, I do not know the future!  But the setup is indeed in place.  Also, it might just be a coincidence that the chart stopped at exactly the decision point shown in my side by side models for the "skyrocket or crater" scenarios.  In truth the market is giving itself as much time as it can in before committing.  It is milling about on the banks of the river, wandering too and fro, wondering if a plunge into the river will result in instant death in the jaws of a waiting crocodile.  That is exactly what is going through the minds of market participants today: fight or flight.

Nothing is confirmed yet in terms of the southward migration.  The herd is staged but not committed.  If some FANTASTIC news happened, the markets could still rejigger themselves into a wave pattern that would meet EW rules while going north.  See the left hand model at the above link for what that would look like.

Below is a close up of the past 2 days of $COMPX action.  Hard to tell if this will turn into an owl or not because of the flat right ear.  The play on this one going forward is not difficult.  The COMPX should not rally 3 days in a row if we are in a bear market.  If this closes up tomorrow it will be 5 waves up and that is bullish.  In fact, if this doesn't open red tomorrow then shorts better go into high alert mode.  For sure if this gaps up tomorrow, the models have to be revisited and all bets against the market need to be sold until a new model is established to explain the unexpected movement.

But for now, the model is still working and so I think the winning money will be shorting the markets tomorrow.  Tomorrow really will be a pivotal trading day IMO.  If it does not break down then odds are that it will break out.  I do not see sideways trading as being very likely right now.  I see volatility increasing.