If TVIX is ready to run up then S+P must be getting ready to plummet, right?

In this post I modeled TVIX as having very, very likely (95% chance) hit a significant bottom.  I like to look at these things from both sides for confirmation and this technique is something which I have actually seen zero others out there doing, ever.  Go look out on the web and see for yourself.  Everyone out there, whether EW or legacy TA practitioner, looks at their single indicator, either bullish or bearish, and then uses it exclusively.  For example, real pros like Avi Gilburt look only at the S+P 500.  Don't get me wrong, these guys are GOOD.  Avi strikes me as someone who has great discipline and always a healthy bit of at least skepticism/fear.  I think that combination is his strongest asset.  But he and others like him could do more: they could look at the trade using what should be opposing indicators and that is something that I have been doing for some time now even as a part time trader.

And so given my recent bullish view of TVIX, have a look at the S+P 500 model below.  In short, after 5 waves up we should expect some kind of pullback.  The recent action is clearly some kind of triangle and so it might not be showing us the top, but is is very likely showing us a top. 

In this model, blue 1 and blue 5 are about the same length while blue 3 is clearly the extended wave.  The current wave that played out over the month of April was some kind of triangle and it has cause the S+P to look very weak.  The triangle, as counted by the black numbers, has finished 5 rail bumps with a throwover on the 5th wave.  Then it broke back down into the channel and through the support level which has been in place for about 1 trading month.  This happening in the context of wave blue 5 being about the same length as blue 1 should be enough for anyone who cares about technical analysis to get to the sidelines (if not flip short).  Breaking back up into the channel negates this view and so the trigger for exiting shorts is very tight.  If this model turns out to be wrong, the stop outs will result in very tiny losses relative to the potential gains.

Remember folks, nothing goes up or down forever and this bull market is very long in the tooth relative to calendar times of past bulls.  Look what Forbes was saying back in Sept of last year.  Back then it said,  "At 4.5 years, this bull market is already one of the longest since the Great Depression. Looking at the S&P 500 back to 1932, the average bull market duration (see graph) is 3.8 years and, in comparison, this one is getting a little long in the tooth."  That was ~180 S+P points ago.  So now the bears have been spanked even harder since then.  Even Hugh Hendry threw in the bearish towel last November.  I guess it will just go up forever, right?

Wrong.  The smart money is sneaking out the back door right now while the last of the bears capitulate, trying to cover their tracks as long as possible.  Trying to get out while the fed is still doing some stimulus.  Not trying to play the Ponzi until the very last second.  Not worrying about catching that last 5% before the free fall begins.  That is what the smart money is doing. 

Well, I don't know that the big crash is about to begin but my models tell me that we are due for a pretty strong correction at the very least.  So the smart money will treat that correction as if it were potentially the start of the big decline.  It will take a bearish stance here and let itself get stopped out should the bull have more legs.  It will not simply assume that a historically long bull market will just go on forever.