Very possible model for NASDAQ $COMPX into late April

In line with my view (since the negative January Effect played out this year) that it will be a walk away in May game this year, I see a possible finish for the $COMPX as shown below.  As an EW practitioner with a predictive modeling bent (instead of just explaining what happened before which is much, much safer to do), I have to look at various possible, and even more importantly, likely outcomes so that when stuff happens it does not confuse me into making incorrect trading decisions. 

For newer readers who are probably thinking all of this is snake oil despite my many good calls on this blog (and fast exits from wrong ones) I don't claim to be able to predict the future, only the possible and likely futures.  On rare occasions I get lucky enough to know what is impossible (or nearly so based on my wave counts which can always have errors) under the rules of the Elliott wave principle.  There is huge value in knowing this because it allows large, leveraged bets which are quickly egressed from if trigger conditions are met.

This sideways crap we are seeing in the $COMPX right now always frustrates traders and it really pisses off options buyers because it bleeds the value of them off over time.  This is exactly what is intended to happen near major inflection points such as we are experiencing right now.

We will have a better indication of whether or not this model is correct by Monday because if this model is correct then the chart should come very close to the lower green support line.  If this is the pattern that plays out then we are already in the new bear market.  If this is the case, wave 1 down has already been put in and now we are working on a sideways 2nd wave which should have 5 rail bounces on the triangle with a throw over on the 5th bounce. 

If you see that, run away from these markets as fast a you can once the wave breaks back into the body of the 2nd wave triangle because that should be the start of the 3rd wave.  Be careful about trying to hold TVIX through this sideways movement because it loses value over time even if the markets remain flat on average.  We should get a few percentage points to the upside over the next couple days and I'm back into TVIX to try to pick up some of those points but if this cannot generate a lower low than wave blue 1 then go to the sidelines or flip long XIV.

I'm also watching SLV and USLV very closely for any sign that they might be ready to decouple from the broader markets.  Right now they are both staying within powerful resistance but have not put in a lower low.  The could change over the next 2 days since metals are still trading mostly in sympathy with the broader markets.

In general, the next 3 weeks should be a time of watching and waiting.  I would avoid any options purchases unless a firm direction in the markets is established soon.  This sideways stuff will gut your options value unless you buy leaps which carry higher initial premiums per strike.  Smart traders are OK with not trading until the conditions are conducive to winning.  People should understand that this game is rigged and so the shorter the time you actually hold any position, the better off you are.  A good example of this was the government intervention during the last crisis that banned short selling of banks.  If that was not corruption of the highest order I don't know what is.  They basically legislated that nobody should have a bearish position, but only for their buddies in the banking system.  I will never, ever forget that.  It cost honest traders many millions of dollars, including me.