[DJIA] update

The backlink mentioned a critical juncture which appears to now have broken to the bullish side.   Having handily broken out of the "must not cross" like mentioned here, you should not be in UVXY right now hoping for a sudden reversal downward.  I myself was stopped out based on the trigger given in this post.  Stops, used diligently and thoughtfully, are your friend (and sometimes your only friend).


While sudden downward reversal of the markets may happen, it is not currently the most likely next move from the herd.  I do not see signs of panic yet.  There are pockets here and there but no wild eyed stallion panic.  There are still headlines warning us of bear market indicators.  These should not be present in any size when the herd begins to reverse.  But mainly, the wave count simply is not bearish and has not been so since I warned of exactly what appears to be happening right now in this post.

In any case, I need a new model.  The wave action supports a count as seen below.  If this is correct we should see a C of 5 wave play out for the rising wedge.  That wedge should then break down perhaps as shown before putting in a final upward stroke.  The assumption here is that the wedge will be W3 and not WC of the entire 2009 rally.  So upon breakout and then re-entry it will be time to pile back into UVXY heavy and using the recent high as a stop level.  A break below blue b puts this model into great question but I see it as low probability.  The herd already tested the top rail and it would have had a fine EW model behind it had it chosen to turn south there.  It did not choose that and so I respect that decision.  The herd is never wrong because the herd IS the market.

Until we see a good short setup such as below play out, consider the miners.  HUI / GDX and therefore JNUG could be breaking out right now, very early stages, still speculative, but if I'm right then they should motivate skyward very soon.