Thoughts on TVIX and the markets.

Folks, we cannot say this market rally or the sell off in TVIX was unexpected.  Whether this is a 2nd wave bounce (as evidenced by TSLA and $NYA) or a 5th wave that will likely short stroke and fail to create a higher high, either way we should have expected a strong bounce off the original bottom.  After all, for more than 5 years now the market has been buying the dip and it has always worked out for the players.  Old habits die hard but they will in fact die.

To my credit, I did warn about the inverted head and shoulder in this post and yesterday I warned that a break below support meant go to the sidelines in this post.  In this post I indicated that the S+P could still go higher leading to a potential target price for TVIX of $2.70.  So again, we cannot say there was no warning about the TVIX sell off.  Greed, meet fear and discipline!

I've been sitting on the sidelines after getting stopped out today. I'm considering buying back in during the after hours trade but the action so far is not as positive as I would have hoped.  I was hoping for a washout bottom and then a recovery in the AH.  So I'll probably just wait for the open to see what gives.  Maybe my $2.70 target will be hit after all.

But know this: I firmly believe that the DJIA if not other indices, while probably in a 5th wave, will not hit a higher high than the high of the ending diagonal which peaked Sept 19th.  The $COMPX could do it but if so then it will not be confirmed by the DJIA and the S+P.   Just let the $COMPX run this insanity out of its system and then we will be returned to our regularly scheduled market panic and economic collapse. 

Once this next peak occurs, my confidence goes sky-freaking-high that the northing of the herd is over and that southing will again take hold.  The transparently false market optimism will reverse and it will turn into real, palpable fear. This herd will be turning south very soon, perhaps as soon as the bat faced disposable fed speaks on Wed.  But here is the interesting par of my prediction: it won't matter what she says.  No matter what drivel comes out of her mouth, the herd will take it badly.  I honestly hope she says that the fed is going to continue buying treasuries in order to hold interest rates down because I would like to test my theories.  But her recent speech, I think, was clear indication that she had to worry more about a pitchfork revolution than falling asset prices.  So I think the stimulus program is over despite what many people say.  Too many middle class and elderly are getting hurt by the inflation scam for it to go on very much longer.  The interest rates will soon be taking off as well.