[DJIA] update

The models from the backlink are still in play but a new model has emerged over the past couple weeks as shown below.  In this scenario we would end up with a failed 5th wave which is the perfect show of weakness leading to a very hard reversal.  A lot of people are watching this model right now so perhaps it won't play out even this bullish. Still, I took my profits on a small position in UVXY into the close and if we get a 3 wave move up into blue D I will really lay into it heavy again with very clear stops defined.

It is also possible that the May high was in fact the peak and that the move into early nov was C of 2, a 3 wave, deep vee retracement.  Much will depend on what happens on Monday.  If we get a gap down instead of a bounce then this HT model is bust and something else is playing out (with bearish implications).

Note that even though I sold my UVXY, I'm still holding a ton of puts, some with Jan 2015 expiration, some with April 2016 expiration and a growing number with Jan 2017 expiration.  My wave count for MCD suggests that a major peak is near so I am building a larger put position there.  And while GE has likely outlasted the big Jan 2016 put position I have on it, I think it will collapse in 2016.  It has been trying to sell of everything that is not nailed down of late and some of the sales are not going through now.  The Electrolux purchase of GE's appliance business which, I believe we will discover in the fullness of time, is actually a junk debt Ponzi scheme (selling appliances to deep sub prime customers on debt).  So I am looking at the Jan 2017 puts there.

Note: The real problem with the failed ElectoLux deal is that GE did not receive the $3.3 bn in cash that it hoped to get from the deal and even more so is the fact that the US government queered the sale citing vague reasons that it wanted to see more competition not more consolidation.  Clearly the government is worried that after the mergers that prices will rise and so it is meddling in GEs business.  IF the government does not have your back in the big leagues, you might want to consider changing teams.  By the way ElectroLux CEO is under fire for losing a 175mm break up fee in the deal but if GE starts to blow up in the next few months he might eventually be applauded for having botched the deal.  IMO anything GE is associated with is toxic waste.