Game plan for Tuesday.

I've been looking at the charts over the weekend and I am convinced that the broader markets are very near a turning point and that the true underlying fundamentals (i.e. the mood of the herd) are terrible despite the meaningless government numbers they feed us about "growth".  Remember, the con men now count consumption as economic growth.  Anyone who believes that talk simply does not understand real economics and when the bottom falls out they will be the most surprised about it.

I also took a long look at the TVIX charts in order to see if I have been missing anything.  Anyone who is following my blog knows that I think we are in the 5th of 5th.  But the finer one tries to track markets, the more the error potential is.  This is why I have always had a difficult time discerning 3rds from 5ths.   Fortunately, there is a simple game plan for Tuesday.

The basic thought is this: TVIX 5/5/5 may have already bottomed or it could have more to go down.  Thus we need to define "invest" and "divest" triggers.  I did that in Thursday's post and none of the action on Friday changed those triggers.  In fact, Friday's action looked like a correction from an upward TVIX trend.  It was certainly not negative.

If you want to be super skittish, the sell trigger is $2.69 but $2.57 or below is a sell for sure.  But if you sell, don't go too far away from the screen because the bottom could dip down quickly and then come back up in order to complete the chart without letting many catch the absolute bottom.

Any trades above $2.85 should be considered TVIX bullish and quite possible the first confirmation of a new bull market in fear.  If you see an intraday reversal at this point (down at the open but then quickly move into the green before noon) then treat it as positive for TVIX, especially given where we are in the count.

If we have to wait more than a week in order to see the market clearly assert its next direction then I will be very surprised.  And, by the way, I think nothing that the fed does at this point will matter.  If they decide to call off the final removal of QE then someone will spin it as a negative or weakness or whatever.  It doesn't matter at this point if the fed sees the train coming at them or not, I just don't think there is any possibility of making a confidence game go on forever.