TVIX update: something significant will likely happen soon.

Last week I bailed on TVIX because of all the sideways action.  I had ridden through several peaks and valleys waiting for it to break out but it still needed to waste time.   Well I think the time wasting is very, very near over.  I cannot say for sure if the next move is up or down.  Metals, I think, have put in a near term bottom and they have been trading with the broader markets more often than not.  So that would presume that we need one more move up in the major markets before the final collapse sets in.

Then again, PCLN, CMG and others that I have blogged about as being near Ponzi peaks have already begun to pull back hard.  In the very short term, the markets appear confused which is so often the state of things near the peak.  And make no mistake about it, this peak is going to be one for the record books.  Prechter has some charts here that will help you understand just how big of a financial bubble the world is in.  As I have warned many times, the bail outs were not fixes.  It was more akin to a man who lost money to the mob in a card game running home to ask mom and dad for their life savings in order to avoid him getting killed.  Instead of paying his debts off (because they did not have enough to do so), he goes back and tries to win it back in the games.  This time when he loses (the game is rigged don't you know), mom and dad cannot help because they already shot their wad the last time.

This is the state of the Federal Reserve market shock absorber fund: tapped the heck out.  Contrary to what many think, there will be no new round of bail outs.  The fed knows that if they do it again there will be riots and the con men themselves might get killed in the streets.  This is not hyperbole.  Bankers are looking at civil unrest, civil wars, secession requests and actual secessions, etc. and they know the jig is up.  They model herd sentiment and they follow it using supercomputers.  They know that one wrong move and the herd will stampede right over the top of them. In order to avoid receiving fair punishment for all the global damage they have done, the con men are now trying to put on a show of being respectable and conservative again.  They are not the only ones.

In any case, TVIX is about to hit the vertex of support and resistance. It will have to break down or break out.  If it takes a direction with a gap on Monday (either up or down) you can trade in that direction using tight stops just inside the triangle.  I will note in the chart below that one can count 5 perfect rail bumps with a tiny, tiny throwover on the 5th bump.  This could have just lowered the lower rail and given the chart a slight bit more time to decide.  Alternatively, it could have just been A of C of 5.  If so, then C will probably be at least as large as A and perhaps even lower than black 1.

We should be only days from a resolution on this.