[DJIA] [S+P500] update

In this post as well as this post from January 2015 I cautioned that the DJIA could be playing out a massive 4th wave HT that would then move up to wave 5.  I provided many potential charts to look for but below is the chart from the 2nd link above which showed the general threat to UVXY longs.



Here is the same chart on the same time scale with the Feb data included.  That sell off into the end of January occurred pretty much per the model and since then we have broken out both rails and hit the price target.  The wave count may need one more small wave up as shown but then it should roll over by Wed at the latest and begin to sell off strongly IFF this model continues to hold.  If it sky rockets up from here to 18400 or more then it is time to suspect a bear trap: get to the sidelines until sanity is restored.

I do want to say again, however, that all optimism metrics are pretty much pegged at 30+year highs and so are all all time highs.  This is not the time to wonder if you should just throw in the towel and go long on discretionary retail IMO.  The smart money is looking for the door at this point.  Don't stand too far away from it because the herd is likely to turn down quickly when it heads south.
 

Zooming out a bit in order to get better context in the larger perspective we can see how [w3] petered out and then fell in 3 waves to [4] before reversing into the current 5 wave move up which is now very near my target of 18200.  This model, should it continue to be reasonably correct could turn down very soon or it could have just put in a small w3 and then 4 down which will peak one more time to perhaps 18250-18400 before finally peaking.

That big wad between Dec and Jan could also be the B wave of a larger rising wedge (Avi's S+P 2300 model) but that is not my primary model at this point.  This could change quickly however if we don't begin seeing significant selling begin this coming week.

The conservative gambler will wait for the top rail of the rising wedge to break down and then pile into UVXY, worrying less about the first 20-30% you of UVXY gains that you might miss out on using this strategy than avoiding any losses on UVXY bets.