HDGE Inverse Stock Indicator Review

 

HDGE-Aug-8-2016

 

Stock complacency has been at very extreme levels, even the VIX has seen lower lows.  Because HDGE is more or less inverse to stocks, we always have to flip the EWP upside down.  Looking at it from an ending diagonal perspective, my Minor degree wave 3 barley squeak by in going lower than wave 1 in Minor degree. 

Now when we get to the April 2016 low the fear factor exploded, which looks like a single fast impulse wave. If we count the small waves, then we could even get a flat, as a count of 7 can make a flat. These are “A” waves, and then following that “A” wave HDGE imploded again but not without another smaller zigzag.  This has the makings of an expanded move, which would be a “C” wave bullish phase.

That should make for a good rally that will force all participants to lose money or force them to change positions in a hurry. This may take us back to the $11.25 price level before the HDGE will implode one more time. 

Just replace my wave 3-4 with another “A, B” in Minor degree and we have the making of another zigzag.  From any  “B” wave top and then heading down would match the stock market 5th wave rally. 

The commercials are very net long with the VIX so their outlook also seems bearish at this time. For now I will work the diagonal wave pattern, as the triangle will take longer and will go deeper than the ending diagonal will.