DJIA update

Today could have been all of 5 down or just 4 of 5 down (the latter is my primary count).  Still, I allowed myself to get stopped out with a nice 14% profit on the day because it looked like an ending diagonal was forming on the Dow.  That implies an AM pop of 20 points and then a reversal to a lower low.  If the wave moves into the range of 16478 or higher then wave blue 2 is confirmed to be "on".  If I see that AM ending diagonal form and then  throw over the top rail and immediately come back down below then I will run back into TVIX expecting the 5th of 5 to play out at about the same size as red 1.

I think the market will do an intraday reversal tomorrow in order to convince the bulls that this annoying little dip can be dismissed and now we can be off to the races again blah blah trees grow to reach the sky blah.  Once I see that 5th wave play out I have decided that I am actually going to flip short on TVIX because given that this is wave 2, the herd should put in a vee type bottom.  This happens because the herd has been used to getting away with buying every dip and so the buying is expected to be aggressive lest the train leave the station once again without you.

But the EW charts have already spoken on the matter as of today when black 5 (so far) confirmed that it was actually part or all of a 5th wave down by exceeding black 3 to the downside.  The guarantees, at the very least, one more big wave down and likely 2 move big waves down (i.e. blue 3 and blue 5 or it could also be a C wave if the count is wrong).  Said differently, right now we confirmed that we will at least get a large a-b-c before going to new market highs.  This would mean that my top level count is off by 1 - what I thought was 5 is really 3.  I think the odds of that happening are quite low but never zero.  But even if that turns out to be the case the charts now owe us a C wave after the coming sucker's bounce dissipates.  And that C wave (or 3rd wave) should be very nasty, likely containing significant gaps.  That will be a fine time to be fully invested in TVIX regardless of whether it is a C or a 3rd.

Since the reason stocks are so high is due to credit expansion, the reason stocks are going to go down is because of credit contraction, AKA "liquidity crisis, credit crisis, credit panic" or several other main stream terms for what I would refer to as "the eventual and unavoidable return to the mean", "credit deflation" and "the dump which always follows the pump".  We should begin to hear more than a small trace of this during 3rd of 3rd down.