TVIX update: wave 2 bounce likely in progress.

In this previous post I suggested that wave 5 of 1 was complete or nearly so - too close to try to grub any more money out of it on the bear track via TVIX.  Even though I was on business travel today I was able to use my handy dandy tdameritrade Android app (which is actually a poorly written piece of shit) to trade into SVXY @$69.80 this AM.  I then set my stops at $68.90 and went about my day.  Turns out that today (unlike the last 2-3 times on JNUG) I did not get stopped out and so I am holding it over the weekend with a small gain.

 The stops will stay in place but I will bail on it  after I see a valid 5-3-5.   Wave "a" up is likely done and then I expect C to be extended as shown above.  With luck I will bail in the $78-$79 range.  Why so high, you might ask?    Well, the prior 4th for the DJIA happened into the close of Aug 4th and SVXY was ~$78.70 back then.  Having said that, I think the DJIA traveled too far up today to simply stop at the prior 4th.  It will likely hit the 50 fib or the 61.8fib.

This high first bounce (a vee second wave because the herd cannot believe its "buy the dip" strategy will ever fail) is why I think SVXY goes to ~$78 before turning back down hard.  It's also why I'm looking for a retracement in TVIX back to at least $3.30.  In other words, a full retracement of that ending diagonal. 

Look at where TVIX ended today (below): kissing the top rail from above.  It will likely bounce in the AM and then reverse downward giving the DJIA buy signal to many who will think this is just another buy the dip opportunity.  After all, it has worked so many time for them over the past 5 years.  Will this time be different??  Yes I think it will but I plan on letting the waves be my guide.  

So my current model is that that black 5 is the end of the first wave up, and now we are retracing back to about $3.30 in a 5-3-5 move.  From there we should rocket up to somewhere north of $5.80 into wave 3.  This is where you want to be on margin (with stops on AT LEAST the margin portion of the trade!!) below the level where you think wave 2 has bottomed (I will certainly render an opinion when that time comes).  With the judicious use of margin off that wave 2 low I expect to double my cash by the end of the first week of September.  

Yeah, I know, it's totally whacky to even talk about it, right?  But I honestly think this will be a 20 bagger (minimum) before the markets finish crashing and that means the big gains better begin pretty soon.  When those who jump back into the DJIA on leverage hoping for a higher high find instead a rapid reversal to a lower low, it will power that TVIX 3rd wave up by leaps and bounds (gaps).

The alternative count here is that the peak shown in TVIX above was really just the end of a big 4th wave as I have mentioned many times in recent weeks.  That is not my primary count but if it should fall continue to fall and to create 5 wave moves downward then let it play out and then jump in at $2-$2.20 after 5 waves down have completed.