Still possible for the other shoe to drop [DJIA] [UVXY]

Today's rally blew through the near term resistance proving once again that stops are a girl's best friend.  Just yesterday EWI had confidently called a peak based on several factors but they uncharacteristically claimed victory even though 5 down had not yet taken place.  The red arrow is where they made their call. 

 

The last great hope for near term shorts is the model below.  In other words, everything since the August dip could still be counted as a giant rising wedge for WC2 or WCB.  If this is the case it must reverse downward quickly as shown or it will be past the vertex.  Nobody knows what the future will bring to a certainty but we do know that 2nd waves which take place early in a trend change tend to be deep vee in nature.  The longs are getting overconfident again knowing that buy the dip is still alive and well.  If this really is a 2 or B wave up then all that could change in an eye blink unleashing a 3rd down that unfolds so quickly as to leave everyone wondering WTF happened.



While this may seem implausible at present, consider that UVXY has not made a new low on this high and that is a very, very unusual thing.  It smells like bearish divergence for the broader markets.  I'll let this play out and then pick UVXY back up again into the close with tight stops on it for tomorrow.