Important juncture for UVXY and the markets.

Given that I think we are at another "groundhog day" for the markets I provided a mid day update for UVXY showing a potential B wave triangle was forming.  The end of day update says that odds favor a continued DJIA rally tomorrow, at least in the AM in order to form the C wave down of UVXY's 2nd wave.  A gap down below the lower rail would kick off the action which is currently expected to fill the gap at the 61.8% fib but is in no way guaranteed to stop there! 

So here is tomorrow's game plan.  I'm staying in RUSL overnight in order to catch the likely pop associated with the DJIA moving up.  I'll be looking for the gap down in UVXY.  My current model expects it to find support at the 50 fib but to eventually break back down to the 61.8.  Sometime in the AM.

I'll dump RUSL at that point and move into UVXY instead not because I'm sure RUSL is going break down but rather because if the 61.8 fib on UVXY holds then I think the odds favor a massive 3rd wave down in the DJIA and UVXY handily breaks out to a higher high than its prior high of $32.  It should be a 3rd of 3rd and so the movement per unit time should be rapid.  RUSL is actually the higher leverage play but I have a clearer wave count on UVXY right now and so until RUSL confirms a break out I'll play UVXY.  For now they still seem to be moving in opposition to each other.

Again, the a and b waves of this triangle retracement used up all of today's trading session to play out.  The C wave should move with conviction meaning it should not meander around all day getting to its reversal point.  If it is not already clear by now, when I say "should" it always implies "and if it doesn't turn out like that then begin to suspect something else might be happening".

Now, what could go wrong is shown below.  The blue model is the primary model which is just a higher level view of the chart above (sorry, I used blue for that, should have chosen red for consistency within a single post).  The red model says that all this choppy shit is really the formation of a HT 4th wave with a 5th wave lower to happen as below.  For a trader you cannot beat that model because it tells you exactly when to buy and sell and lets you know very quickly if the model is invalidated or not.   A lot of cash can be made in a short time if you can see a 4th wave coming like this and trade the swings.  I would like to point out that, so far, there is a lot of mid wave "hash" that could be counted as a "B" wave in each of the waves.  So don't count this model out and in fact, hope like heck that it occurs because once that 5th wave breaks down it forms is a very high odds bottom which enables you to go all in and even use a bit of margin.  When gambling having the odds in your favor is everything.