Market and TVIX update

Per yesterday's post, today was a critical trading day for the charts.  I'm in a hurry so I will keep it simple.  In short, TVIX seems to be more influenced by the $COMPX than by the DJIA right now.   The fact that IBM tanked today and then management called the shortfall "an operational issue" which affected "the back end loaded season" tells me that the CEOs are in denial but the market is ignoring their "hopeful guidance" and selling the individual company when the earnings don't meet snuff.  Bottom line for shorts is that the bad economic news is now affecting the big guys and soon they will have to admit that "they didn't see it coming".  When that happens, the markets will begin to freefall.

For now, I got stopped out early on TVIX today and then just sat back and watched until near the close for some kind of good wave count to emerge.  Below is what I am going with for now because it is about the only legal count I could find.  The major things to note are:

• The red horizontal line is probably being hailed as an H+S breakdown.  The target for the bottom of this, according to legacy TA, will be in the $2.260-$2.70 range.  The only problem with this is that it would kill the current wave count which says we are retracing a 3rd wave.  We will soon get to see whether legacy TA gets the nod on this or not but I can tell you when for sure the EW count would be wrong and that is anything below the pink line.
• The blue line is the top of black [1].  If we are really retracing black [3] into black [4] then it must not go into the range of black [1].  If it does, sell like Hell and then wait for a new count.
• Anything lower than the pink line probably means the current count is a bust but below [1] cinches it.
• The reason I bought at the close was twofold
• 1: the pullback has reached the level of the prior 4th wave of one degree smaller (blue 4)
• 2: there is a clear stop close by ($3.62).  If that triggers then I suspect that TVIX could fall below 2.50 and I do not want to take that ride.

Bottom line: Tuesday is the day.  It is make or break for this count top level count.  I won't fight it if the count breaks down.  I take my losses on the stops and wait for another setup.  This is how you win this game: 3 steps forward, 1 or 2 steps back.

So far, there is no wild panic in the markets but the panic will come.  All the big players are in question now that big blue got sold today.  I even saw an article questioning Google's growth.  So the herd is beginning to come to the realization that the Ponzi Party is at or near the end.  Still waiting for that big 500+ point down day on the DJIA to stoke up some panic in the herd.  But for now I have to play it day by day until we get a confirmed 5 waves down.