IWM, XIV updates 12/7

IWM: big picture update to show you better where price now is over the long haul. It has most likely now finished blue Primary III/C. I label it III/C as one can never know before hand if an up move will be 3 or 5 waves. But, it will likely be a 5-wave sequence, given where the other indices are (see big picture counts here at top of page). There was a clear 5 wave advance off low made in early 2009. No denying. A break below the yellow uptrend line is now needed to fully confirm Primary IV (preferred POV) is underway. Strong support is in the $130 zone (around yellow major-3).

IWM monthly


XIV: For those who read these updates regularly you will start to notice the same theme. A lot of either major-3 or Primary-III tops are being carved out. XIV no different. It is currently in an ending diagonal triangle (white lines) off the green minor-4 low made 6 months ago. This ETF started in late 2010 and of course bottomed late 2011 during the European Financial Crisis back then. Since voltality has only gone down and XIV (and equities) up. But nothing goes up for ever, and after 3 comes always first 4, so things are getting close for a bigger decline in XIV (and a spike in VIX). Based on Fib-retrace levels and Support levels on the price chart I expect (assuming XIV is close to topping, which is best confirmed with a break below the lower white trendline of the EDT) it to bottom between $82-$70. That’s of course still some ways away, and there will be many twists and turns before price even gets there. But it shows that upside potential is not really worth the downside risk anymore.