DJIA really should start heading down from the open tomorrow.

If this is a major turning point we should not expect the bulls to go quietly.  This is why we need to stay in touch with our fear.  But if you go by gut instinct alone the market pros will kill you every time.   They know the mood of the herd better than the herd does.  They know what we like, what we don't like, when we are complacent and when we are fearful.  They just have to look at the order books and then apply a ton of custom algorithms to a million market inputs to figure out where the max pain will be for the herd and then that is what they will do. 

This is why I sold TVIX when wave 1 down had completed.  I saved myself a few percent of retracement but unfortunately I did not have the discipline to wait for confirmation that wave 2 was over before jumping back in and it cost me today.  Fortunately my DRD partially offset those losses.  I sold my DRD a few minutes before the close for a 23.7% overall profit today in order to buy more TVIX after the close today for $3.11.  I will be very quick on selling it again tomorrow AM if I don't see what I want to see.   I hate to sell a winner to chase a loser but I will reverse this quickly if I don't get nearly instant gratification tomorrow AM in the form of a falling Dow, S+P and $COMPX.  They all need to be falling at this point in order to be credible.

So below is how I count it.  Note: we are well above the level of the prior 4th and well above the 61.8 fib here.  Neither of these are good signs.  At the same time, this is a battle royal between the shorts and the longs.  The 5 year old bull is old but not just going to fall over dead.  Anyone who intends to profit from its demise is going to have to put up with pain if they want any chance at gain.

Zooming into the 5 minute chart just to see the C wave (lower left), we should be looking for 5 subdivisions.  I think they completed right at the close with a failed 5th wave.  Maybe there is a small move up left in them shown in blue but that is about the end of it.  It cannot be higher than 16930 without 5 being longer than C which means the count is wrong (so get to the sidelines and rethink).

Zooming way into the 1 minute chart, it looks like red 3 ended with an ending diagonal and then 3 waves down for red 4 and then an ending diagonal up into red 5.   At this resolution it is hard to be sure.  It could also be that what I have as red 3 is really red 5 and that red 4 is really wave 1 down of the the new downfall into the larger scale wave 3.  That would make the ending diagonal with all of the blue candles in it on the right wave 2.  This would be a vee type 2nd wave.  Either way I think we should not see anything higher tomorrow AM than what is labled red 5 let alone red 3.  In fact, if this really was waves 1 and 2 down at the very start of the next sell off then we really should get a gap down type opening tomorrow AM.  Time will tell.

One more thing to note: This Friday is options expiration.  I have seen many, many times where a fake rally will be staged right up into expiration in order to get to the max pain point.  That is when the highest value of options expire worthless.  So this should factor into our thinking as well.  Market manipulators are active during options expiration.  Still, they are part of the herd and all of their moves should be reflected in the wave count.  It does, however, provide at least an explanation of why the ending diagonal top rail could have been broken back out of today.  This must repair itself very very near the open tomorrow or I'm going to have to show some discipline and sell my TVIX and then wait for a better entry point even if I believe we are very, very close to the bottom of it.