[UVXY] update

Last Friday I advised that I quintupled my normal UVXY position looking for a big move down in the broader markets today.  Today I sold it all for a fat 16.5% gain in the name of risk management.  I've mentioned in these pages many times that I think UVXY is more tied to $COMPX than to DJIA and $COMPX has stalled at a potential resistance point after doing what might turn out to be a near term head fake H_+S breakdown.

Many will look at the blue neckline and the gap down below it and decide to go all in short because a H+S broke the neckline.  They might in fact turn out to be right even though I do not like H+S whose left shoulder starts from below the neckline like this (red circle).  Too many of these break back up above the neckline.  And while I do recognize the power of that gap below the neckline, I have the luxury of having predicted this weakness in advance and that means I don't have to take unnecessary risks.  IF there is one thing that defines a good trader it is not making top or bottom calls correctly.  That is the "drive for show" part of the game.  It's flashy and sexy and gives bragging rights, all of which are emotional in nature and therefore self destructive to the trader over time.

The "putt for dough" part of the equation is risk management and it is the tougher of the two skills to master because it requires that you almost completely disassociate gain with pleasure and loss with pain.  This is almost impossible for humans to do and those emotions blind you to the data.

I'm not saying that $COMPX must bounce like Cyan here.  In fact, primary is red and secondary is blue.  What I AM saying is that if cyan were to happen with me quinted up in UVXY then it could devastate my trading account.  So I will now step back and let the rush of emotion (what can I say, it's hard to avoid!) of today's gains dissipate.  This is my money now, not theirs, and I need to think of it like that.

I'll wait for the next EW-defined setup before I get back in and in fact I'm more likely to begin focusing on the oil patch soon since my model says USO should be catching a big bid once USO puts in 5 down from the Jan 28th high.  Always better to go long something than short something IMO IFF the long provides the right EW setup.  I remain on record believing that USO will likely double into the summer.  The CHK collapse is no doubt scaring the powers that be.  We will NOT be seeing any more rate hikes in 2016.  That would be a death blow to the US energy sector and you can bet Yellen is getting blamed in internal circles for doing any rate hike at all in this environment.