Wednesday, February 4, 2015

Tomorrow is groundhog day for the markets [DJIA]

The charts for the major indices have been trickier to read than other things.  I warned well in advance that this would likely be the case because the market doesn't want to telegraph to too many people.  It want's to screw the most people possible.

But tomorrow it is running out of options.  It either has to enter a 3rd wave up (3 of 5 after having completed the e wave HT throw under) which I listed as being possible in this post OR it will be the end of a super deep vee 2nd wave correction as shown below.  Again, sounds like "markets can go up or down" but EW makes it very actionable.


Here's how: If DJIA can go just one penny beyond that red horizontal line then we know the bearish model is busted and we should consider the possibility of a strong 3rd wave rally in stocks into 3 of 5.  If it happens, don't sit there and hold UVXY!  Hoping for good things to happen because the odds will be greatly against you in that case.  In this case, Avi would likely see his 2300 on the S+P and that has strong implications for later because he counts this very differently and more bullish than EWI.

However, if the selling begins at the open OR there is a small pop to 5'and then it just begins to freefall to a lower low then I suspect my long-predicted 500+ point DOWn day will be upon us very, very soon and this would be exactly the time to buy into UVXY on the dips (if you are lucky enough to see any big ones under these circumstances).

Once this breaks out or breaks down, the market indecision will be over and rapid movement will most likely be had in the direction of the move.

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