TVIX update

On August 5th I provided a detailed set of models for TVIX which you can review here.  Below left is a reprint of that model.  Below right is actual to date:

Zooming in, we see that the A wave tested the lower rail of the ending diagonal, the B wave was a small bounce, and the C wave took the lower rail out out.  I now count 5 waves down from B so C of 2 is likely in.  In fact, after that I count 5 small waves up so I think 1 of 3 (or 1 of 1 of 3) might also be done.  Of course there are other viable alternative counts.  The move down into 2 could really just be A, the 5 small waves up so far off the bottom could be a of c of B, etc.  All of this could be followed by another downstroke to wipe out leverage shorts that are not using stops.


The concept that the 2nd wave pullback is already done is negated if we get a lower low.  In that case we should expect that the blue model shown upper left is unfolding.  Do not be surprised if we find that the TVIX ending diagonal does a full retracement as shown upper left.  This is not my primary count but if TVIX moves to a lower low than today's low then it will quickly become my primary count.  USE STOPS and hope like heck that TVIX gives it all back so that you can grab an even bigger bite of it well below $3.

I bailed on SVXY and then bought back into TVIX heavy at $3.31 as reported here.  Since EW is all odds and not certainties, I have to say that I am happy about that lucky timing.  The timing is lucky even if we get a lower low.  I do not expect a lower low right now and so I have set my stops @3.28.  If my count is wrong, I risk a 2 cent loss.  If my count is right, I will nearly double my money during wave 3.  I already banked ~10% on the SVXY swing while avoiding today's 12% peak pullback in TVIX.  A penny not lost is in fact better than a penny earned because Uncle Scam Sam can't tax you on the benefit you receive by sidestepping losses.

I would have preferred to see wave 1 up assert itself more forcefully so it is too soon to be talking about any TVIX gains from my recent buy point but I can tell you I won't be losing anything even if I am dead wrong about the count because my stop is so close to my buy point.  Also, I am surprised that the pullback would be finished so quickly.  I was thinking Tues-Wed, not Mon.  So do allow for another wave down on TVIX by using stops.  But if we get that C wave down in 5 waves then don't be timid.  Load the boat and just use stops below what you think 5th of C is.

Good luck, fellow gamblers.