Don't stray too far from TVIX folks, it should be heating up soon.

I got a little bored with TVIX today and so I took a small profit in order to play JNUG.  I subsequently provided another potential model for TVIX which suggested that one more wave down is possible.  That model is still possible but I want to show both sides of the deal so that nothing is taken for granted.  Why?  because near the big turns we often see a variety of confused looking indicators before the market re-organizes itself into the new direction.

In fact, it makes sense if you think about it; there is always one bird in the flock that turns, (then two then four) before the body of the flock decides to turn and then it happens as a chain reaction in an eyeblink.  Check out this short video of exactly this happening.  Well, humans are a herding species too and so while we don't want to admit it because of arrogance and foolish pride, we behave in a similar manner.

In this post I provided a model which focused on MSFT because it is considered a leadership stock.  That original model is on the left below.  The actual is on the right below.  Not only did it break back down into the channel, it gapped right over the top of that support line which the market clearly knew existed.  So far it has only put in 3 waves down but that sideways action is like the 4th.  One more wave down will begin to signal that big names are taking motive waves down and, like the flock of birds, the markets can switch direction in a eyeblink.

Bottom line: TVIX is much much nearer to a low than to a high.  It could play out the remainder of a 4th and then that final 5th wave OR the recent move down could have been considered a short stroke 5th wave by the market.  If it breaks out the top rail without putting in the required number of rail bounces to be counted as a proper HT 4th then don't hesitate to jump in.  Once in, set your stops for anywhere within the body of the triangle in that model or if you want to hang it out a bit further, just below the lower rail of the triangle.  Once TVIX begins to take off it will move like JNUG did off the bottom: very quickly.  Not as quickly as JNUG probably (that is probably the most volatile ETF in the whole stock market...) but fast enough I reckon.

Mark my words: @ $2.50 or even @ $3.00, TVIX is CHEAP CHEAP CHEAP.  The moron retail gamblers have been shorting it and they think they kant miss.  When it turns on them it is going to chew them into little pieces folks.  The next run won't be to $6.  It will be to at least $8-$10.

Keep an eye on MSFT to see if it puts in one more down wave in order to print 5 waves down.  Once it does that, the odds are very high that we see a move back down to $39.68 (minimum).  That would be the 38.2 fib of just the C wave of the 3 wave move since 2009.  In other words, a very conservative pull back target when in fact I think the damage could potentially turn out to be much greater (as in sub $6 by 2017).  This is not a guarantee of any kind, just an observation based on this wave model: