Attention crew, all hands meeting on the bridge.

I've already warned you that this bull market is long in the tooth.  There are no certainties on the exact timing but we are in the scary months with the market at extremes of optimism.  It is about the same as flying the space ship "Asset Market" into an asteroid field after having quaffed a bottle of scotch and tossed a handful of 'ludes.  The market is high as a kite, ignoring all the exponentially increasing risks and waiting for a setup to begin a very bad collapse.

The last near miss was called as a potential top and the market dropped hard after that only to rebound to a higher high.  I'm calling that last peak a 3rd, the subsequent drop a 4th and the current action is most likely the 5th and final.  That makes pretty much all of 2014 one big long rising wedge. 

The chart just kissed the top rail.  This could be 1 of 3 of C or it could be 5 of C.  There is no way to tell at this point except by how far (or not far) the chart retraces.  The blue path below depicts today's action being 1 of C.  The red path basically says that today finished 5 of C.  For now, because of the extreme sentiment in the markets and the fact that it would likely take most people by surprise without breaking any EW rules, I will call it 5 of C.  This can change quickly into 1 of C next week should the data demand it.

Zooming in to just the 5th wave of that wedge (5th of C), we now have 5 waves down that is likely 1 of 5 down but could be A of 2 (with 2 being part of an upward 1-2-3-4-5 impulse).  Then a clear a-b-c into what is likely 2 (down) but could also be B of 2 (up). 

At the very least we should see a pullback shown by the red line.  If the market is going to eventually break out of the top rail of the rising wedge, it should do so on the 3rd wave (3rd of C).  Thus, if we get a big rise in the DJIA after only 3 waves down then sell TVIX and wait for the 3rd, 4th and 5th waves upward to finish out the impulse and the use the opportunity to pick TVIX up at much lower prices.  We will know this is probably the case if this bounces and then comes back up into the range of what is labeled as "1 or A" below.  Why?  Because in the market bear scenario that bounce would be wave 4 which should not make it back up int the range of 1. 

It's pretty much that simple at this point.

For the market bullish (TVIX bearish) case, I would think that, even though the wedge rules have been satisfied by kissing the upper rail as shown above, a large wedge like the one that has been going so far would have a significant throwover, not just a rail kiss.

For the market bearish case, the rail kiss was done with a triangle and that is a sign to me that it was a a 3rd or a C wave.  In this case, it would be a C wave because we since got 5 waves down.  Also, the bounce from "or A" was a clear a-b-c into the 61.8 and then a small wave down to the 50 fib, a bounce to test the 61.8 fib from below and then a rapid collapse down to the 23.6 fib.

Folks, Spaceship Market won't last long in an asteroid field when its crew is shitfaced drunk from the credit punch bowl.  Some economic asteroid is going to come sweeping in and smash the crap out of the space ship and then, with captain Yellen having lost the confidence of the crew, the ship will drift within the asteroid field just taking hit after hit after hit until the hull gives way.  The crew will man the escape pods, what few of them might be available.

Meanwhile, we will be hovering on the periphery, having dodged more than one stray asteroid ourselves with only minor hull damage by not being at all drunk and instead very observant at the controls.  We will be there to salvage the remains of whatever remaining useful pieces of Spaceship Market the asteroid field known as deflation spits out the other side.

Hang on crew.  It promises to be one heck of a ride.  It's about to get sporty around here.