Definitely reaching some kind of peak here in the markets.

The DJIA and the $COMPX were at total odds with each other today.  The DJIA was weak and in the red, the $COMPX was strong and in the green.  I have shown multiple proof points in these pages where big name blue chips are bleeding away, some of them at a notable rate.  Check the charts of BA, MCD and others.  At the same time, charts of INTC and MSFT are still peaking.  This process of reversal of a 5+ year bull market will not go easily but it is definitely going to happen very soon.  It would not surprise me to get a sell off (which many are now expecting) of 5-10%.  At that point, the market can breathe a fake sigh of relief that the expected correction has come and gone and, hey, it wasn't that bad.  That would be a green light for the "buy the dip" crowd to pile back in on even more leverage.  Eventually the trap door opens causing max pain while leverage is the highest.  All the signs are there in many places albeit not readily visible to most people because the collapses in progress are muffled by the sound of record breaking broader indices even if it is happening on light volume and on a narrow advance:decline ratio.

The chart below differs from that of EWI.  They still believe that the July 3 top was THE top.  But the DJIA broke out of its July 3 top and the S+P 500 nudged above it's July 3 top (albeit by a meager 3 points).  I thus think that the $COMPX is also eventually going to create a higher high, especially when looking at the wave structure leading us here on the $COMPX.  The sell off into early april seems like a "3" not a "5".  And the rally since then can easily be counted as a 3 as well.  Plus, this would be the most bullish scenario which gives priority to the current bullish trend.

If the model above is true then I think the wave since July 3 have to be counted as A and B respectively (not marked on the chart).  That means we should see 5 strong waves down into C to kiss the bottom of the channel.  If this happen, I will certainly sell all my TVIX and then wait for the bounce.  If EWI is correct, the bounce will be an a-b-c  and then a smash through of the lower rail.  If this new model below is right, the lower rail will hold and then markets will rally into late Q3, early Q4.  These of course are the danger months for major market reversals.  The skies grow cold and the herd gets nervous and much more skittish.

Time will tell but in either of these scenarios I think that we have to have a pretty good sized sell off over the next couple week and that is going to goose TVIX nicely.  Any break of that lower line means to load up on TVIX.  Support there means to be wary, lose margin or lose all of the shares until the breakdown occurs.  This is the smart strategy.

A breakout above that upper rail, as unlikely as I currently view it to be, will immediately negate this model.

If the above model plays out it should show up in TVIX as a pretty large double bottom.  Note that $COMPX would have a higher high in this case and so one would expect a lower low in TVIX.  But I don't think that will happen this time.  I think that the market is easing its way into insurance right now and this will prop up the price even though the sands of time are constantly leaking from the options valuation behind TVIX.   So if in a month or 6 weeks we see a higher high on $COMPX but an inclining double bottom on TVIX that is a really strong buy signal.