[$COMPX] update

As commented on by reader Steven B, yes, the suggested model for $COMPX provided here did not pan out.  This market just doesn't want to die.  Tough thing, this predicting the future in near real time business.  Of course, if it were easy or you could always win then everyone would be able to do it.

At the same time, I used this model like everyone else and I scored several grand on today's trading session simply by getting stopped out properly on UVXY and then looking for another target of opportunity which I found in the form of a massive B wave on JNUG.  In my situation I have time in the AM to do this before work; not everyone has that.  So those folks cannot quickly change strategy like I can.  But at the very least, people should not be losing much money when the trade takes another path than the model.  If this is not the case then re-evaluate your stops!

For example, I took no less than two intelligent, EW swipes at trying to catch the exact bottom on CJES.  I got stopped out for one penny one time and for several cents the other.  I then just moved on.  Getting stopped out is part and parcel of this game and I think my strategy plays well into the coming huge increase in volatility that all of the pundits are expecting.  Yes you get stopped out more but when the trade goes your way the cash piles up quickly as well.

Below is tomorrow's working model for $COMPX.  In summary, the model suggests that today's action formed a so call Flat Correction.  Flats are frustrating on two fronts: they tend to retrace quite a ways up and they end with 5 waves going in the countertrend direction.  When many EWers see 5 waves going in the wrong direction and they assume that is the direction of the trend.  This is not true with flats or with expanded flats which have a 3-3-5 structure.

The play is simple for tomorrow.  If the chart goes higher than pink 3 then just lay off UVXY until you see 5 full waves up.  Keep in mind the characteristic movement of flats which is copied from the EWI link given above: "Flat corrections usually retrace less of preceding impulse waves than do zigzags. They participate in periods involving a strong larger trend and thus virtually always precede or follow extensions. The more powerful the underlying trend, the briefer the flat tends to be. Within impulses, fourth waves frequently sport flats, while second waves do so less commonly.".

So it is possible that the C wave of the flat was already put in today and that the selling starts tomorrow.  Of it could be as shown where the red rising wedge was w3 of 3 (not annotated above), then a pullback to the lower rail of the wedge for 4 of 3 and then the final thrust to 5 of 3 which I designated pink 3. Given the shape of this chart, I bought a large position of UVXY at the close and am holding it overnight.  The reasoning here is that it looks like a 4th wave triangle or a declining double top.  If the latter then $COMPX will open up red tomorrow as wave 3 plays out.  It could even gap down hard.  But if it has one more wave up then it would probably be a triangle giving me plenty of time to bail out when I see it break out to the upside.

I still believe that one day soon the DJIA will lose 500 or more points in a day and that will be the start of real fear.  If this does not go my way then I will be looking intently at JNUG since its pattern is already established.