JC Penny (and all of retail) is in big trouble

The busy looking chart below tells a grim story for JC Penny:

 

To recap, the shares plunged in the first wave of the collapse from $88 down to $14.   Then Bernanke stepped in and began throwing the economic kitchen sink at the global markets.  The result has been a significant multiyear rally and without much price inflation in the US.  JC Penny responded by doing a dead cat bounce to nearly exactly the 38.2% retracement while simultaneously tracing out a flag formation/rising wedge (both of which signify just a pause in the real trend which is still down). 

 

After the “e” rail of the flag was hit, the stock collapsed below the lower support (in 5 small waves - wave 1 of C) and then rebounded to back test the new resistance from the bottom.  That backtest was a 2nd wave.  I believe this has to put the shares into a 3^rd wave and it will be a 3^rd of a C wave so it should have some bad downward gaps in it (AKA "cliff diving").  As a bellwether for retail I think the JCP chart is telling us here that Bernanke is about out of gas to stimulate without causing inflation (otherwise known as “sterilized” stimulus whereby the stimulus stays within the banks for the most part and thus does not make it into the economy where it can cause prices to go up).

 Rapid price increases in which wages do not keep up has always been bad for retail as is deflation whereby the value of assets goes down dramatically.  In either case the consumer is left with less buying power and thus consumption is reduced.  I would be surprised if JCP makes it through the coming depression.  Bernanke has fixed nothing.  He only succeeded providing golden parachutes for some of his banking buddies while making the coming collapse that much worse for everyone else.  I wish people could understand that there is no free wealth, only the perception of it (a basic concept which is at the heart of any Ponzi scheme).  So if someone is making out the back door with lots of wealth then you can rest assured that there is less left in the game for everyone else that does not have the special privilege of being a well-connected moneyman. 

All this talk about a US depression still sounds a bit crazy for now, I’m sure.  Still, with literally thousands of hours of research and study into the matter I remain convinced that someday, and likely much sooner than anyone thinks is possible, the troubles caused all over the world by the US driven scam of fiat currency and fractional reserve lending will certainly come home to roost. 

 

It would not surprise me to find that Bernanke has been putting the federal reserve at more risk than he wants to in the short term for the express purpose of keeping the economy from collapsing until he can help get Obama re-elected.  Romney is on record saying he will fire Bernanke (a damned foolish thing for him to have said IMO even if he really did mean it).  Once Obama is re-elected, Bernanke is more likely to let the pain fall through to the American people than to hold as much of it on the shoulders of the federal reserve (through the process of “sterilized” stimulus).  After Obama gets elected, the sterilization will be less important to Ben and so he won’t worry about it so much.  In fact, the fed is sending secret signals out about this right now according to Michael Pento.

Disclaimer: Lest anyone think I am picking on Obama, my position should be crystal clear: I think both GOP and Democratic parties are corrupt to the core and that both have the same basic value proposition of promising more to their constituents than they can deliver but to deliver at least part of their promises using endless debt.  I think both will resort to causing war if the economy gets too bad because they believe in creative destruction (a Keynesian scam) and thus in the concept that war is effectively economic stimulus (they don't care who gets turned into hamburger on the battlefield as a result because their children are always exempt).

In short, Obama=Romney=Bush=Clinton, all of whom are scumbag lying fronts for the miltary industrial complex that is really running the USA as well as the world.