Tuesday, March 24, 2015

[S+P500] update

Here is the backlink to the last post which had an S+P 500 chart in in.  It was dated February 26th.  Below is the high level chart from it.  I had modeled that the recent move to 2120 was the very peak.

Interestingly, no higher high has yet been seen since then.  What we in fact have seen is 5 waves down into blue 1 below and then a very, very deep vee retracement which, so far, has fallen short of creating a new high.  I count this as an a-b-c retracement and thus the likely completion of wave 2.  If this count is correct, the S+P should not be able to make a new high than black 5 even by a single penny.  So I think it is likely that UVXY has bottomed.  Of course, UVXY is highly dependent on the $COMPX so there is no direct link to S+P 500 but if S+P cannot move higher then sooner or later everything else is going to turn down.

I plan to buy UVXY tomorrow and then only sell it if S+P makes a higher high.

Importantly, while DJIA and $COMPX and S+P500 all closed just slightly red on Monday, the Dow Jones Transports bleed off  from a high of 9178 on Friday to 8969 on Monday, a hefty drop of ~2.28%, most of which happened on Monday while the DJIA was green for most of the day.

This is a great setup here folks. On the one hand, the 5th wave down that I predicted well in advance would happen for UVXY did in fact happen while the big bounce in the S+P, which is not atypical for a "deep vee" 2nd wave that occurs as part of a major turn, came very nearly to the prior peak.  The S+P could in fact go higher from here but as soon as it makes a new high that would be the sell trigger for UVXY.  Thus, very small losses would be incurred by the stop.

Time will tell but UVXY could be ready for some very nice upside action beginning tomorrow.  This is what the odds favor.  All bets are bust, however, if S+P rises above 2120.  This is the kind of asymmetrical bet that carefully modeled Elliott waves enable us to take advantage of.

No comments:

Twitter Delicious Facebook Digg Stumbleupon Favorites More