$COMPX update

In yesterday's $COMPX update I wrote:"The first step would be to break down the lower green rail and to potentially back test it from below.  Per the lower right picture, I think that could be happening right now.  Then we should see the lower blue rail get taken out."

Today the sell off was significant in terms of percentage and market participation.  Today I smelled a bit of early fear.  Not wild eyed, rebel yell panic, mind you, but eyes did get a little wide and pupils did get dilated a bit.  We ain't seen fear yet but I reckon it's mos def coming. 

Per the model below, the wave did break down below the green support, rally back up to kiss it good bye and the initial part of a larger 3rd (likely 1 of 3) played out.  Obviously from here, any break back up into the channel is bullish for stocks and TVIX should be dumped immediately and without ceremony in that event. 

Other than that I think we just hold on for the ride until I think 5 good sized (black numbers) wave down have occurred and then get to the sidelines to side step the likely strong bounce.  Or, for this first bounce, even go long SVXY as it could prove to be a vee style bounce.

I know it has been a long time since this crew has felt kind of wind filling our sails.  Breathe in deeply of the fresh new air!  It has been liberal storm after liberal storm after lying liberal storm for the shorts since 2009.  That big of a stretch can make people second guess themselves and make mistakes.  Fight the urge.  Know that the rally since 2009 is likely over and know that the most likely outcome is that the massive expanding wedge formed by the S+P 500 and the DJIA are going to collapse.  Theses indices will likely put in lower lows than 2009 and not just by a little bit. 

If you understand the larger wave count you will see that we are still retracing the massive grand super cycle degree 3rd that ended with dot bomb.  The wave since then has been an expanded flat which is why, even though that massive 3rd should be retracing, the markets were allowed to reach higher than the 3rd wave high.  What it really means is that the coming 5 waves down into supercycle C of grand supercycle 4 is likely going to happen very rapidly from here.  It could all be over within 18-24 months. 

Let me say this again: The prior 4th wave target on the DJIA is well sub 1k.  A natural retracement is the level of the prior 4th.  That means that the DJIA could collapse down to below 1k within 18-24 months.  "How can this be possible?", you might think.  The reason it is not only possible but probable is that the whole thing is a house of cards with promises and debt and IOUs and agreements and guarantees all stacked one upon the other in order to keep the funny money confidence game scam going as long as possible.  Debt has been used to pump this up and debt can default in an eye blink.  It can even happen so quickly that the short ETFs default on you (like TVIX) even before you can get your gains out.  That's what the power of 3rd of 3rd of 3rd of C can do: massive, domino style defaults and you really will not know who hasn't been skinny dipping until the collapse is done and the dust of the twin towers clears.  Until that happens you should assume that everyone is swimming naked in the ocean.  When you quad or quint your TVIX winnings, don't be afraid to take back your original bet out of the markets and then leave some of their money to ride if you like.  But don't assume anything fair will result.  Fairness will be out the window and possession will be 9/10ths of the law.  Forget this simple rule at your own peril.

Trust in the waves and forget the lying con men whose lies and treachery just ooze out of their pie holes.  They will say anything, do anything to trick you but at the end of the day we will revert to the mean and the mean is going to be very, very mean this time around.  The extreme liberalism and foolish sheeple-thinking that "government is inherently good and would not lie to me or cheat me like that" is exactly what enabled the con men to lie and cheat to a historic degree.

Oh yeah, and get a gun and learn how to use it.  The police will not be able to keep up with the crime that is coming.  I fear that I might be required to shoot someone in self defense before this is over in order to protect myself and my family from the disorder and violence that will erupt when people who think they have nothing left to lose decide to "lose it".