[UVXY] update

In the backlink I suggested that the recent action supported a trip down to $22 or even $20 before a serious bottom was in.  Why?  Because after 3 waves up I saw 5 down, and 5s really don't come alone.   They are generally part of something else.

So I stepped back today during the weekend when I had some time and built the higher level count.  The result is below.  What this chart suggests is that the recent low ([5]), is the completion of a big wave which began in Jan of this year with [1].  After the bottom we had 5 small waves up and then a 3-3-5 sequence which could easily count as a flat or turn into an expanded flat early next week.  But it could also gap up on Monday an if it does I would buy the first pullback you can find because the fear trade is about as beaten down as the gold trade: shorted, hated, believed to be of no further use now that we have a new, fed controlled normal.

Let me assure you that the fed has nothing under control.  The wizard ozT will at some point have the curtain pulled back and everyone will see that it is a fraud.  Those who were counting on the fed to control the market forever are leveraged in margin debt to the eyeballs and so they will, at some point, have no choice but to either deleverage rapidly (and with many of them racking up losses which will threaten their jobs) or to buy insurance.  Probably first the insurance purchase and then the big selling at a loss IMO.  Time will tell but do not be shocked if UVXY begins to show real herd fear as early as next week.

Failing that, I'm sticking with my view that a serious bottom will be found in the $20-$22 range with minimum bounce target of $50 at that point an perhaps much higher.  Fear has been hated and even shorted for a long time now.  That is eventually going to blow up in someone's face big time.