As expected, resistance held but the rejection off of resistance was not what I hoped for. What separates the good wave counters from those who simply know the rules is experience. This herd didn't touch that fence and then jump away so it is possible that electric fence is down.
It was very unlikely that the herd was going to be able to brush up against the invisible fence like that and hop over - the so called one inch punch is not common. So a pullback of some sort was needed and even though we appear to have a 3 wave pullback to the 16280 level I don't think today's low was the full pullback. More about the reasoning behind that below. Note: sometimes you need to see the picture in more detail. Like the one below might need to zoom in because my model lines obscure what happened today. To do this in firefox, right click and select "view image" and you will see it in the same resolution as it was created. Internet explorer is stupid in this regard, there is right click option to view picture, only to save it (and then view it in a picture viewer full size). That's too many steps so I recommend firefox for viewing my blog.
OK so in the event that the threat model (blue) plays out, why don't I think that the 3 waves down into today's low was enough? The answer is multiple reasons and if you are trying to find hints that give you higher probabilities then pay attention to this next bit.
First, look how the wave tested that down sloping blue line from above twice, then broke down, and now is back testing from below. Will it do a 1" punch to break out on Monday? Maybe. But these are rare and so I can't give it the odds nod. Second, a proper pullback from what is obviously a motive up from the 11th wave should be at least the 38.2 if not the 50 fib. Note the gap just below the 50 fib. If the chart pauses there and reverses it is a good indication that another wave up is coming.
While I have this picture up, if the chart goes below today's low on Monday and then hits the 38.2 and finds support and then bounces back up and breaks the lime green line then it's the first signal to sell UVXY if you held it over the weekend like I am. If it then breaks above the blue down sloping line then that is the warning track as they say in baseball. I'm hoping for a rapid sell off at the open and then looking to see if support will be found at the 38.2 or the 50. If it finds support at either I will sell UVXY and then buy back only if a lower low occurs after the bounce.
OK, next clue (but certainly not a crystal ball) that DJIA heads down from the open on Monday is that I can possibly count a tiny but complete HT. That would be a B wave in this config, not a 4th. This is a bit of a funky HT so I'm not completely sure about it else the blue line below which is currently my secondary count would be primary. But because of features like this red is not primary by much. I place odds @ 55:45 that red is primary; not a slam dunk. But pretty likely to be down from the open and perhaps even gap lower than the lower rail of the potential HT as well.
And finally, do you recall this post where I suspect a rounding function on DJIA as it rolls over? The recent move down to 15500 needs another move back up into the ~17k range in order to meet the blue trend change curve. Note that the angle down is generally a bit steeper than up so I tried to draw that into the model below. Anyone who sees a move up to DJIA 17k-17050 as bullish has never seen a rollover function play out before.
Final note: anything except for weakness from the open in DJIA means I sell UVXY and then wait to see what happens next. Why? Because there are several possible outcomes and I only like the ones that are likely to gap down.
This is how you play folks. You don't make a bet and then see it start doing something unexpected and then hope for the best because the market sharks will eat you alive. The chart either behaves as expected and you make money or it doesn't and you don't stick around to wonder why. Even fake paper cash is a much safer asset class than wall street fake paper shares.
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