TVIX really might have bottomed...

I wanted to zoom in on the TVIX model I provided here.  If I assume that all falling wedges are 3rds then we should see one more small wave down tomorrow before breaking out through that black down sloping resistance line.

I don't know if this will be the bottom but it presents a credible count. 

I do want to say something to people who might have taken the round trip to $6 and back down to the 2.30s in TVIX: do not give up now!  We are close to a bottom and when it does find bottom, the volatility shorts (which is not just a trading euphemism, it is a real, tangible thing as Jared points out to us in this post) are going to get squeezed and this post is my model for what is going to happen when they do.  Keep your eyes on the prize!

I'm telling you, TVIX is going to take off like the space shuttle right before your eyes.  It will probably hit the top rail and then throw over to $10.  That's better than a 4 bagger from here folks and I think the odds that it will play out are high because the fundamentals are that regular old retail "investors" have effectively bought into the concept of the Bernanke Put.  No, they did not do it early on like the smart money did.  Instead, these retail Nimrods are jumping into SVXY on the tail end of the deal and, like usual, the smart money will at some point spring the trap on them.

Nobody is going to get away with shorting the crap out of volatility folks!!  That is like thinking you can win the war on terror!  It seems like you are winning for awhile and then it all goes south in a blinding flash of fear and panic.  Volatility is just waiting to explode upon the markets.

Disclaimer: I bought TVIX and am holding it until at least the model shown above is proven wrong.  My primary path is the blue path above, so one more small 4 cent wave down and then the breakout should be upon us.  Stops at a fairly loose $2.24.