I just sent out an Interim Alert to the Blue Line Classic - Intermediate Term members pointing out a Wave 5 Sell Signal set-up in the Dow. If it triggers (a close below the channel lines in the chart below) new lows are likely below the February 9th Dow low at 23,360. That's at least 1,000 points lower and maybe more. At the same time we are Long 7 out of 8 Short Term models (VXX Short is equivalent to a market Long). That is too Long in the advent of a Wave 5 Sell. Accordingly, I am buying the SPY May 265 puts in my own account as a hedge. If the Wave 5 Sell is triggered, I will buy more. VXX is too far from going LONG so waiting for a VXX Buy Signal is not a good proxy right now as an alternative hedge. The next three hours are critical. We may be on the cusp of a new leg down.
