This has since occurred as of the 6th of Feb. Now we are trying to determine if that was the entire 5th wave or just 1 of 5. The jury is still out on this but since that peak we had a clear 5 waves down to test the upper rail from above. That was likely either 1 or A. Since then we got a pretty clear a-b-c retracement telling me that the current wave should be sold not bought because it is likely a deep vee 2nd wave OR a B wave. So I now expect a pretty rapid sell off as shown in red at the very least.
Now here is the important part: if that wave cannot break through the top rail then we have to assume that the peak of Feb 6th was just 1 of 5. Kissing the 38.2 fib and testing the top rail from above without a decisive break down very likely means that it is wave 2 and you should run away from UVXY at that point. This is the best case scenario for longs.
The worst case is that some news comes out and spooks the herd turning what could have been wave C down into wave 3 down. In that case will will clearly see it as the selling should be more intense. In that case, wave 1 will likely test the top rail which will hold, wave two will bounce back up and then 3 of 3 will break down hard through the top rail and maybe even take the lower one out with it. So the time to buy UVXY is right now at $24.44 and then carefully watch to see which outcome the herd will choose.There are unlimited, an infinite number of possible outcomes at this point. I know that. The future is impossible to predict with perfect accuracy. But EW enables us to ignore all of the infinite number of outcomes except two or three of the most likely ones and then focus on those. That is real power folks even if it isn't a crystal ball.
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