Heading back down into wave 5; TVIX will trade well above $6.50 during 5 of 1.

The markets had the option of rolling back over at the 38.2 fib but it looks (so far) like they decided to do the orderly thing and come back up to the 50 fib right where the chart would meet a downsloping wave parallel to 1-3.  Note that those lines are exactly parallel as evidenced by the fit of the cloned vertical markers. 

It is always possible for the market to decide to go for the 61.8 but if this is the start of a new bear market then you really should mainly see 38.2 and 50 fib retracements, not 61.8 and very unlikely anything higher.  Such bounces show strength that simply should not be in play if Wall St is trying to sneak out the back door leaving everyone else holding an empty bag.  They do not want to telegraph but they do have a lot of leveraged assets to sell and, as posted in these pages before, volume has lightened way up so the markets are thinner.  Thus, a little selling today will have a lot more impact than the same amount of selling in markets which are more liquid.

When volume begins to spike and shares begin to freefall, that is when you know the mass market has finally decided that someone big is selling.  In other words, the cat gets out of the bag and everyone begins selling at the same time in order to not be the bagholder.  All of this talk about bag holding really should make people think carefully about the intrinsic value of stocks are.  Most of them have no more worth than baseball trading cards.  Some pay a small divvy but look at oil prices plummeting - it says global demand has dried up.  That means manufacturing is in collapse mode.  That means collapsing sales, collapsing profits and dividends become unpayable.

If this wave count is correct, it will express itself strongly into the afternoon and probably gap down on Monday with intensifying selling pressure.  A higher high on the DJIA than 16428 must force a run to the sidelines for a re-think.