W2 Correction?

Last week I posted the market was going for 1423 when the 200 DMA and the TA was tested and the market fulfilled my prediction by gapping up and topping exactly at 1423 before starting its correction, which I think will now go for the TA or even the 200 DMA again given the Fiscal Cliff uncertainty. So far, I counted 5 complete waves intraday from the 1423 top to the 1408 bottom so we should see a bounce before another bearish wave to test the TA/200 DMA. And again, given the environment we could see a deeper retracement before a big rally so I'm hoping they (politicians) finish up negotiations before Dec 20th so we can have a nice Santa Rally.

I bought back the VXX position and took profit at the end of the day since I am expecting a bounce. Also, I want to avoid holding on to this ETF overnight in case something gets resolved and profits get wiped out. HSI btw made a new high for the year as I was expecting and started a W2 correction of W1 of W5.

Main S&P 500 Trends 

Short Term Trend = Bullish
Medium Term Trend = Bearish
Long Term Trend = Bullish

Long Term Portfolio

• 100% Long in Red Chips traded in HSI (Mainland China stocks traded in Hong Kong).

Short Term Trading Strategy 

• Bought 500 VXX @29.23 on 12/03/2012 - Closed @30.12 on 12/03/2012. = +0.89
• Bought 500 VXX @30.77 on 11/23/2012 - Closed @29..68 on 11/27/2012. = -1.09
• Bought 500 VXX @31.54 on 11/20/2012 - Stopped out @31.11 on 11/21/2012. = -0.43
• Closed position 500 @ 18.26 on 11/20/2012. Sold 500 @ 17.79, raised stop to break even on the other 500 as of 11/19/2012. Bought 1000 XIV @15.98 as of 11/15/2012 on margin - position trade cost improvement 4 cents, so net cost $15.94 as of 11/16/2012 - Profit = $2.05 
• Bought 1000 XIV @16.88 as of 11/14/2012 on margin - Stopped out @ 16.66 on 11/14/2012. = -0.22
• Bought 1000 XIV @15.67 as of 11/08/2012 on margin - sold 1000 XIV @ 16.25 on 11/12/2012 = +0.58
• Margin positions in Gold initiated 11/06/2012.