TVIX update

Sideways action as was seen today must generally be considered a consolidation for the existing trend which is higher.  Again, that is conventional logic, not something cast in stone.  Also to the advantage of longs is the fact that no trader wants to start a big selling program just before a holiday weekend.  They want their time off to be without worry, not getting calls from those on high at the bar-b-que family get together, etc.   While it doesn't always work out like that, it's just easier to schedule any planned selling for after the holiday.  And yes, professional traders plan their buys and sells.  They don't just show up at work, read some headline and then have it influence them into making a significant trade.  That kind of emotions based behavior is best left to Mark and Patsy. 

In any case, TVIX has clearly had 5 waves down.  But there is no extended wave among the 5 and so questions remain as to whether the count is really done or not.  Let's assume worst case for TVIX longs.  Let's assume that wave 5 shown below was really only 1 of 5.  If this is the case, then TVIX should be headed lower but not before a full a-b-c count is seen to retrace 1 of 5.  If we get a sharp-ish C wave rally to somewhere in the blue rectangle (which fills the 3rd of 1 gap) or even extending to the 50% fib then expect a gap down and then lower lows, perhaps with 5 of 5 ending in the $2.20 range or so.

If we get that then my confidence level in TVIX will go much higher, contrary to how most people would react without benefit of a wave model to lean upon.  They will be saying "TVIX never goes up" and "it's all manipulated" and then they will give up right when they should be buying with both hands.  Nobody can say that I did not anticipate and document the possibility of a 5th wave sell off after the last big bounce from 2.65 to 4.20 (an bounce which was itself predicted in these pages by my models).  People who fail to use stops always get dejected even with such advance warnings (I know because I lived through it myself in trading years past).  An extended 5th down to $2.20 ish, should it occur, would be a strong, strong buy signal IMO.

Until then, just leave your stops below the low of the 25th.  Soon enough I think we will be able to raise those stops and if I see an a-b-c I might even sell speculatively in the $2.80 range and then hope and watch for a lower entry point.

Buy low, sell high folks.  Emotion free trading based on the wave count and defined triggers.  This is the only possible winning strategy for the individual trader against the Wall St. machine which relies on us to do emotions based trading for its profits.  This is the art of the con.  Use Mark and Patsy's greed and fear against them as a weapon of cash destruction.