Important market update [S+P500]

The model I provided earlier today played out almost to perfection.  I think you have to admit that EW is unique in being able to even having a small chance of being able to predict what could probably happen in the last half of the trading day like that.  Legacy TA is like a blunt Axe compared to EW's scalpel at cutting profits out of the market.

In any case, I leveraged up UVXY big time on the B wave breakdown and sold all of the leverage right at the close for a nice, nearly risk free profit.  So now the S+P chart has come back to the lower rail in a nice a-b-c pattern where the C wave is a beautiful 5 part subwave but was unable to break down decisively.  Per my prior post that is a sell signal and so I sold all of my day trading leverage and most of my cash-bought shares of UVXY.   Still, I kept a 1/3 position on UVXY just in case the EWI model turns out to be right.  Even though my model looks correct I know it is not a crystal ball!  It is only an odds assessment tool for what might/will probably happen.

What I marked W3 was in their count a 2 of 3 peak.  That means El Gapo Downo 3rd of 3rd for the the markets on Monday if my model is wrong and theirs is right.  Personally I think that I will turn out to be right this time but given we are so close to a major top even by my own count I am hesitant to have nothing in UVXY over the weekend.  I know full well that it is possible for the markets to just open up 5,7 even 10% down in one single day, thus leaving potential shorts who did not want to hold over the weekend in the dust.  Big gaps like this could likely at some point figure into the market's strategy of how to screw so many leveraged longs who have been increasing their positions as the markets have crept up.  Slow breakdowns would allow everyone to get out and math tells us that this is not possible in a Ponzi scheme.

If the Swiss Franc can revalue 30% in one day, anything is possible folks.  The global economic world is a massive house of cards just waiting for a still wind to happen along.

In any case, here is my trading plan:

If the markets gap down on Monday then I am going back into UVXY big time at the open.  Why?  because the odds will have shifted away from us seeing one more red wave up if the channel shown above is broken down decisively.  If that channel breaks down and is not immediately retaken by the longs then Katie bar the freaking door because a 3rd of 3rd down will be upon us and my next S+P 500 target would become 1950 before we even have a glimmer of a chance for a reasonable market bounce.

If they don't gap down at the open on Monday then I will bail out of my weekend 1/3 position of UVXY and only get back in if we see a lower low than today's close.  If we don't gap down on Monday's open then I expect an S+P move to just shy of 2100 on the S+P.  Can anyone venture a comment as to why I pick that number (and not just "because that's what your chart indicates"!).

So here is the big payoff folks.  If my count is right, you know, the one I saw potentially coming all the way back on January 8th, SCE, then the final wave up should be the end of the entire 2009 bull market.  That wave should peak, break down below the low rail and then begin to accelerate quickly into a massive bear market.  If we see the 5th wave play out in the AM and then get a subsequent reversal and close red then it is more good evidence that UVXY is THE place to be.