Here is what I expect for tomorrow. Basically, a head fake down to the lower rail of the expanding triangle to form the B wave. Once that is in, a rapid whipsaw move back up to the green line which is the approximate location of the 38.2 fib. It could also get to the 50% fib but I doubt that because it would have to cross the orange line which is the upper rail of the ending diagonal and that is not typical. Typically the retest from below just kisses or just misses kissing the new resistance line before bouncing back down hard. If I see the 38.2 fib get touched on 5 small waves I am back in.
If at any time the chart breaks below Friday's low, I am jumping back into TVIX even if it doesn't retest from below first. But I must say, a 23.6% fib rebound just seems too weak for a market that is still sitting near record highs with no real sign of panic anywhere I look.
But people should be getting very worried because of all the things being said in the news by people like Blankfein and others. They should be getting very worried at seeing the BA chart break down its ending diagonal like it just did. They should be nervous at the declining double top of GE. They should be concerned about the twin towers in the chart of Toyota. And they should be concerned with record levels of investor optimism, record levels of margin used to buy stocks and record lows on the VIX showing that nobody has bothered to buy any insurance on their leveraged long positions. This is a recipe for a rapid and massive decline folks.
I will be the first to admit that nobody knows what tomorrow will bring but I also know that when you are gambling, the main thing that matters is playing the odds and the odds are running out on this bull market of 2009-2014. This bull is dying. Just put a stake in the steak!
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