SPXL, SSO, UPRO update 11/9/2015: time to revisit the leveraged ETFs

SPXL: our preferred count has SPXL in intermediate iv of major 3. Ideal target for major 3 is now the 123.6% extension at $97.50ish. The very bullish option is that in fact only minor 1 of intermediate iii peaked, as it looks like an Leading Diagonal finished, but we view that as less likely. If price drops any lower, then major 3 peaked prematurely… sadly enough because then major 5 will only reach to about $100… Note that we count SPXL as having Primary IV completed at the late September-low because price retraced 99.69% of the prior a-wave low. Although by the rule book it can still be a 2nd wave (see SSO and UPRO), it is technically simple too much for a 2nd wave.

spxl

 

SSO: Contrary to SPXL and the S&P500 and DOW we count SSO as having completed all of IV at the late August low, because the late September low simple stayed well within the typical Wave 2 retracement levels. We can see that price last week peaked a bit shy of the 138.2% extension, and has since retraced 38.2% of all of iii (later retrace % not shown). We expect intermediate iv to find support here or at the (green) minor 4 level of around $64.25 at the most. Any lower, however, and we’ll be counting this correction as a major 4. In that case, we expect major 4 to hit the 100% extension at a little shy of $63. In that case major 5 can be major 1, as 3 wave >1 and still target $73is :-). For now, however, we focus on a further subdividing 3rd wave. The v=0.618x i ratio from the minor 4 level targets $69.30: the 1.618x extension of major 1. A typical 3rd wave level.

sso

UPRO: Same story as with SSO. Major 1 and 2 completed late August and late September, respectively, and major 3 is currently underway. We find it very hard to count 5 waves up off the (red) intermediate ii low, unless intermediate iii and iv are where we have labeled minute i and ii of minor 5 of iii. A bit weird since the intermediate wave would be smaller than the one degree less minor wave, but it is what it is in that case. In the preferred case, intermediate iv is underway/finished as the 38.2% retrace was hit today. Price must now make new highs to keep this count alive. If it fails, then major 4 is underway with an ideal target between $64.70 and $61.70: the 100% and 76.4% extensions, respectively. Since in that case 3>1, we can expect major 5 to be equal to 1 and target the 176.4 to 200% extensions at $77-$81. For now, if intermediate iv is in, we expect a $75 target for major 3.

upro