TVIX update - strong buy right now.

I averaged down in the AH yesterday hoping for an AM pop today but knowing that $3 was a nice round entry point for others.  And so I held through today's minor dip action because it was so sleepy; not high speed motive.  It suggested to be patient. 

Well, the options gamers generally do their magic leading up to and on the Thursday before options expiration and so I think they might be done for this week.  Tomorrow will obviously tell but the reason I think this is the shape of TVIX and other charts.

I re-did my count of the 60 minute waves from scratch just now, this time adding a full sub-counts.  I got the same counts for the large turns and I was easily able to come up with a plausible interior count which worked out perfectly (i.e. no unexplained "features" of the wave stream).

If I were not already fully "invested" in TVIX, I would do it right now in the AH.    Any break below today's low = immediate sell because it would mean that these 5 waves are not the whole motive move but rather just wave 1 down.  The norm is that if wave 3 is the extended wave then length of 5~=length of 1.  It's a guideline not a rule but it should be kept in mind.  Yes the blue bars on the left are the same size, I used the charting clone tool to make the copy.  You can see that added to wave 4, this indicates the possibility of a bottom down to the $2.30 range which would have merits in and of itself. 

But if that is going to happen then I think they have to at least give us an a-b-c back up to $3.50 which is a nice % gain from here.  If that happens as an a-b-c then we have to fear that it is only a sucker's bounce and that these recent 5 down culminating in red 5 are only 1 of 5.  Stops should absolutely be used below $3!!!!  Don't sit there and "take it" if it is going down to $2.30!!  Bail out, sidestep the carnage and buy a lot more shares in just a few days.

They say in golf that you drive for show and putt for dough.  It is no different in the end game of a major market direction turn.  Let's say the eventual bottom is $2.  Those who catch it there make 10x when it flies back up to $20 or higher (and it certainly will given the historic lows that volatility/put buying is at!!).  Those who catch it just $2 higher will only make 5x at the same $20 price point.  That's why it pays to work hard to sidestep the losses and ratchet down the entry point.  I will not have to work this hard at all once the herd turns south.  I will not have to consider a trade every day or even every week.  But the extra effort here in what is likely the end game will pay off huge benefits later on.

Bottom line expect stocks to begin to head down tomorrow.