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TVIX topped into the Red Target Box - what's next?
In my report posted last Friday I predicted a rally in TVIX from 22.65 to 25.08 – 25.80.
Back then I wrote:
“From here we may get another rally in TVIX targeting 25-25.80 in wave c up. That would complete a corrective wave ( b ) up and set a stage for another strong decline in TVIX in wave ( c ) down targeting new All Time Low.”
Yesterday we topped into the Red Target Box posted last Friday. As expected, TVIX made a-b-c up after an impulsive looking decline. Because I view potential for one more low in ES I should check whether TVIX is able to make one more high. Well, it can do that because it is wave ( b ) up that so far managed to stretch to 41.4% of the preceding impulsive drop in wave ( a ) down. It can easily stretch to 50% retracement at 26.21. Again, it does not have to go higher again because it has made a clean corrective a-b-c move up.
The demand zone starts under 23.08. I am going to sell my VXX puts there and see whether TVIX will be able to play that one more rally targeting 26.20. If it does, I will be super happy to re-short it there.