TVIX update

In my previous post on TVIX I modeled that the chart could go below the bottom of the expanding triangle.  While TVIX did that today, the ending diagonal it put in looks more like a 2nd wave pullback than anything else.

Because of this I now see two possibilities at this point:

1. The downward wave today was A of C of 5 of 4.  In other words, the model from the prior post is intact but it will take a few days to play out.  This could have just been A and that means tomorrow a rally in TVIX but not a new high.  Perhaps something in the $3.09-$3.13 range.  If it stops there, expect it to sell off to a lower low the next day.  I would guess a low of about 2.85 in that case.  That will take out all of the stops between here and there and set the ETF for a rapid climb.
2. Today's downward move wasn't A because the prior peak wasn't part of a 4th wave triangle.  Instead, it was a 1st wave of an internal stutter step that will result in an extended 3rd.  By that I mean that June 23rd was 1 of 5, 24th was 2 if 5, 25th was 1 of 3, today was 2 of 3.  If this is the case then tomorrow will break out with gusto and form a higher high.  It should be something like a 15+% gain if this is the model that is being followed.

Either way I model tomorrow closing green for TVIX and then traders can figure out if they want to sell off and let it go sub $3 or just hang on for a couple more trading days of volatility.

Note on the 3rd of 3rd model: The big trading houses don't often begin a new selling program right before a major holiday.  Of course, it could be different this time.  We are at the very peak of a monster debt Ponzi.  Let me say this: if selling begins with great force before the 4th of July break it was not because they wanted to do it.  Something will have happened and it will have pulled forward their sell off plans. 

I would view any large pre-holiday sell off as being extremely bearish. Think about it: if you were a trader with such complacent, easy, fed-supported markets for the past 5 years, would you want to fuck up your holiday weekend with a sell off that would require your strict attention nearly 24/7 for several weeks straight?  The big money is made at the turns so you can't just go about your business and get to it when you get to it.  This is how the other traders will eat your lunch.  It's just something to look for over the coming days.  A sell off of any significance before the break would be bearish.