Market update

Well, today I was less than thrilled about the action in the DJIA and the $COMPX but I gave them the benefit of the doubt because the market could not stop me out again at $3.25. 

Note that the TVIX chart below includes extended trade because volumes are still quite good at that time.

If on Monday we get a lower low than today's TVIX low out of the gate then I will get stopped out.  At that point I would need to see something special in order to get me back in. 

If we instead get a good move up on Monday only to breach the top orange rail and then fall back into the channel, then I'm gone upon re-entry (blue path).  The reason is that would complete a 4th wave horizontal triangle and thus a trip to $2.70 becomes likely.  Any subsequent break out upward from that top rail should be bought.

If we get a breakout and then resistance (pull back) at the 38.2 (green line), I will sell TVIX and then wait for a breakout above the line again for fear of the red model which is simply the blue model with a larger E of 4 throwover.

Of course a big TVIX breakout on Monday (should it occur) that takes out the 38.2 with gusto likely means that the bottom is in and TVIX wave 3 up is upon us.  This being wave 2 of a new bear, I can have an opinion but I cannot allow it to override the data.  A deep vee 2nd wave retracement for the DJIA can go up and do a declining double top; Despite expert opinions from the likes of EWI, we should not allow ourselves to think that it can't. IT CAN.  It can also turn out that the DJIA ending diagonal is being treated by the herd as a 3rd wave with one more wave higher to come (or at least a full short stroke 5th...).

All I know for now is that we are above the 61.8% fib and that is generally the highest I like to go while still thinking that its just a retracement/sucker's bounce.  This is where a lot of shorts could get burned and so this is what we have to be very wary of.  The difference at this point is going to translate into huge percentage point deltas between the results achieved by the best traders and those achieved by everyone else.

Again, a small DJIA pullback on Monday will not be enough to keep my interest in TVIX!  It will have to start falling with some conviction right from the open or no later than 10am central.  Also, I do not expect a DJIA/$COMPX gap up of ANY size on Monday, even a small one.  If we get that then I am just going to sell TVIX into it because we should not be seeing that kind of strength this late in a 2nd wave.  Paying attention to such character flaws in the wave are how I have sidestepped many a trap both short and long.
 
If the DJIA cannot begin to break down very, very soon then I am going to lose faith that the lower rail of the ending diagonal is providing the resistance that it should.  In that case, the current wave could turn out to be a very deep vee correction send TVIX even lower.  If this happens then I will look to JNUG because it will likely be breaking out during that time.

I am not stuck on TVIX or shorting if the data does not support it.  Getting stuck on an idea is emotionalism.  That is not to say "DJIA to 20k", etc.  I think the top is very near.  But lots of people are in the news, including EWI's Steve Hochberg, talking up the coming decline and that never is a good sign IMO.  The fewer people are talking about something at a potential turn, the more likely it is to happen.  We should also be wary that AMZN sold off big time today yet the $COMPX rallied higher.  The only reason I am holding TVIX over the weekend is that it put in a higher low today. I hope I am not sorry for this on Monday!