I model 4 of C of 2 in progress. This is a very, very important juncture for the markets. We had this deep selling this AM and then a massive recovery. Many will be thinking "just like the last flash crash". Likely many bought into this bounce thinking they would make bank for the next wave up. If this model is correct, all of these people are very weak hands and they will sell at the same time if this shows signs of topping.
My primary model says that once that gap is filled, big downside is the most likely outcome. The trade on UVXY here is pretty obvious: wait for the count to peak into C of 2 and then buy into UVXY with tight stops just below the low that occurs as $COMPX peaks. It my count is right, UVXY will likely be over $100 tomorrow as this chart breaks down into a lower low than today's low. That kind of action would really spook the market and set us up for significantly lower lows.
Time will tell.
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