[DJIA] closes 500+ points down [UVXY]

Well folks, it finally happened.  The unstoppable DJIA closed down 500 points in a single day.  You know, the one I have been talking about each time a possible breakdown point was likely including just this morning at 7am before the fireworks even began. In that post I wrote, "If you are not already into UVXY then you should consider buying the dip IMO.  There is no real panic yet but we are reaching the phase where my 500+ point DJIA down day could take place and that would certainly set the herd panicking.  UVXY is shorted and hated into the ground.  Fear has been disrespected to an historic degree because of course the fed has it all under control.  This is likely in the process of changing.  But even if Avi turns out to be correct, the price target for this UVXY bounce should be $50."

A 500+ point DOWn day has been my long standing trigger that fear was finally being felt by the herd and UVXY closing up 34% today sort of underscores that point.  I bailed out a little early today but when I saw the HT forming I knew we had one more wave up into the close so I jumped back in and bailed out again @~42.  This is because I think we get a dead cat bounce on the DJIA early next week before the bombs start dropping again.  No way is this sell off over.  Not with the DJIA having dropped the 500 point loss indicator.  It needs to shimmy back up a little to draw in some buy the dippers before coming back at them again hard.




Yep.  The DJIA was down 530.94 points in a single day.  Yowsir, yezireee.  This herd is scared now.   If you missed out on buying UVXY when I was calling it a buy at $25, don't fret.  I don't even see UVXY wave 1 up being done yet.  I think today was 3 of 1.  4 of 1 is modeled to be a vee correction because 2 was sideways.  EW alternation doesn't always work but it should always be the first assumption in your models.  Note that the 38.2% fib would be 35.83.  Not the gap in the 32 area as well.  That is just above the 61.8 fib but I really don't expect this to relax down that far.  Not after my 500 point DOWn day indicator was tripped.  Make no mistake, this was a significant event in the mind of the herd.  The Buy the dip crowd will probably make an attempt to save this but I think the herd will trample them to the downside.

Right now a lot of people are trying to tie this or that reasoning to this massive, scary selloff.  Just forget it.  Turn it off.  It is totally meaningless and worse; it misdirects your mind even if you are suspicious of it.  You cannot really blot it out so the best thing to do is simply not watch.  Trust the charts because they told us in advance that this was likely to happen.  I mean, why do you think I loaded up a second tranche of LUV  puts right as that set of owl ears appeared?  Fundamentals?  Something I saw on CNBC?  Naw, it was the chart and nothing but the chart.