The current action looks like the blue path got taken. The chart is kissing the 50 fib from below and it appears to be providing resistance. It could possibly take the red path but more likely it will deflect downward per the green path and then one more move up to the 61.8% fib which stands at the level of the prior 4th. It could also gap up over the 50 per the blue path and then again likely run out of steam at the 61.8% fib.
Note how this model the falls down to the low 17k level. Also note how that would be the level of the prior 4th, how the wave in between them might have been a rising wedge (Co f B?). In other words, it's possible (even though EWI doesn't think so) that the recent high was just another 3rd wave (it was a rising wedge after all...) and that this could be a 3 wave move back to the level of the prior 4th. So, while I do think there is another big wave down coming for DJIA starting in the next 1-2 days, I'm not yet convinced that it will be the start of the next big bear. But it will be quite trade-able from a UVXY perspective once it bottoms.
I will say that I have noted several times up until this point that I have not seen any fear in my fear gauges (UVXY, IBB, JWN, etc.) even though the DJIA dropped 600+ points over the past couple weeks. UVXY actually seems to be tracing out a 5th wave down despite the markets being down. This is actually less healthy than it might appear because it shows a high degree of complacency. When the markets lose their fear, that is when the bad stuff tends to happen. The markets appear to be counting on "buy the dip". One of these days that song is no longer going to play.
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