$COMPX update - what to look for.

In this post I showed a model of a rising wedge on the $COMPX.  In this post, the top rail broke down into the channel and then back tested from below as seen in the model at the bottom of this post.  But in doing so, it surfaced another possible model shown as a secondary model (indicated by the color blue in the second link above).

But instead of kissing that upper rail good bye and then heading lower, the herd decided to break back out of the top line and the $COMPX is actually sitting right on top of it.  This, IMO pushed the big triangle from being my primary model (orange designation in the link above) to alternate count (blue rails in the link below).  The new primary is now the orange rails and its associated count.  EWI is saying the rally is over but I'll remain skeptical as long as the chart remains above the top blue rail.  Also, if the orange model turns out to be correct then the path from 4 to 5 should be an a-b-c made of 5-3-5 and it would not surprise to find the B wave is a triangle.  Well, the wave is about half way to 5 and it looks very triangular.  So if the chart does not break down very quickly next week then I will be concerned that the red path will be taken.  That's 100 $COMPX points higher than today's close which is probably worth about 20 cents to TVIX.  Well, if that happens then we are at $2.35 which is quite close to my long standing warning that these ETFs often bottom in the low to mid 2s.  Of course, larger short term bearish potential exists that we need to keep aware of.

Bottom line: a break down below that top blue line and then the bottom orange line likely means a big sell off is in order.  If that happens, do keep in mind that this rally will have ended with a rising wedge and those have been 3rds.  So while the $COMPX trip back down into wave 4 of C could provide a very nice short term TVIX rally - perhaps to the $8 range - it could also give a lot or all of it back once the 5th and final wave of C plays out, perhaps as late as 2015.  I'm telling you: if this breaks down the lower blue rail from here and then does an a-b-c back to the start of the wedge at around 3950, I'll sell TVIX and likely flip long for wave 5 up.  That's how good these rising wedge indicators have been to me of late (i.e. at least a year now).