DJIA update

As shown below, now I model wave 2 back up as being complete.  The small bounce dip and bounce following black 2 should be the beginning of wave 1 of 3 down.  This choppy crap is highly indicative of a corrective wave as opposed to being a motive wave like wave 1 own was. 

The purple line is the top rail of the big ending diagonal and so the chart has come within a few points of it now.  This is a very typical back test from below, what Prechter calls the kiss good bye.  Failing to be able to re-take this important technical level (perhaps the most important technical level of the entire period 2009-present) is going to be noticed far and wide.  Trading computers are certainly noticing it.


We should see lower prices going into tomorrow according to this model.  Anything else should raise alarms.   I'm back into TVIX as a result of this action and would quickly step back out if the chart were able to break through the purple line for any reason.  Not that this would be the end of the ending diagonal model but rather that if I see a ripple in the water that I don't expect then I'm going to assume it is a croc.  It is much more important to be more skittish here at the potential turning points than later on once the trend has established itself.  Fear and discipline will win the stock market game, just as it does for life in the wild animal kingdom.