JNK update: lookouts below, dive! dive! dive!

Around the first of the year I suspected that the JNK ETF (Junk Bonds) was in the process of topping out as it created a chart formation known as a double top. 

I wrote about it here.  At left is the chart I posted at that time. The owl, of course, normally symbolizes wisdom to the elite but with the lighthouse getting dim (check the long standing photo on my blog's front page), I think it's more like the owl being the sign of death.

Why so? Well the JNK bond fund went into a massive nose dive as a result of the near collapse of the global financial system a few years ago.  Now, due to unprecedented government intervention in all markets, it has completed an ending diagonal formation (which I suspected would be the case on many occasions prior within the pages of this blog).  I wrote that a breakdown of this sucker bounce formation would result in a rapid plunge of these shares and that the entire market would collapse in a chain reaction over time.  In all of these charting models the breakdowns come by degrees.  They have to go through "gates" so to speak because that is the way the herd operates.

These gates are called technical resistance and support levels.  In an update post discussing the JNK ETF, I suggested again that the JNK ETF was ready to break down.  The annotated chart at left was taken from that post.  You can see how the long green line at bottom was support on the way up but then it broke down and could not break back up through from below.
It tried and tried and even reached a new high but when faced with the intersection of two strong resistance levels, it broke down.  Since that post, the chart has gotten even worse.  Here is what it looks like now (zoomed out significantly):

From this it is clear that the chart touched that resistance point like it was an electric wire and jumped back down.  It is now tracing out a 3rd wave (see the gap?).  I expect a final smallish bounce upward off the long term support line (red).  I expect that the actual touching of that line will be the 1st wave down.  Then wave 2 will probably be a big bounce back up, vee style. 

If I am right, that 2nd wave will soon tire and then it will turn downward and re-test that long term red support line.  I suspect this will unfold with great power - a 3rd wave that will smash down through the red line using the power that only a 3rd wave could ever hope to offer.

IF (cough, cough, when) that happens, Mr. Market will become suddenly nervous.  After all, stocks and bonds (and any other paper based assets) are essentially worthless unless you can find a greater fool than you to sell them to.  Fail to believe that economic truism at your own fiat-currency-is-the-new-tulip-mania peril.

Of course, there is an element of apparent chaos to everything.  Apparent chaos (it only appears so to the limited mind of man) is an architected feature of the very fabric of the universe. The decision point/trigger point for my technical analysis of this chart will be tested very soon now; we will soon know whether my 90% certain breakdown prediction materializes or whether the 10% manages to hold on a bit longer.  A breakdown below that red support line without a very, very rapid retaking of it to the upside will mean the herd is throwing in the towel and that no amount of government promises will cause it to look back.

What you are really witnessing here is a chart in confidence of the government to control things.  It is no coincidence that the chart lost support at about the same time that Obama started getting media scrutiny and derision for Benghazi, the IRS targeting, felony phone tapping and illegal reading of emails of news reporters looking for leaks, etc.  Obama's enemies were quiet on Fast and Furious gun running operation but now even that is being dredged back up.  I'm going to repeat it because it sounds just so conspiratorial and crazy today that I want it in writing as nobody will believe it if I just say it later on: It will not be too many more years until we finally see people, en masse and without batting an eye, accusing and proving government of complicity in the 911 terrorism.  It was obviously (to me at least) a false flag power grab over the sleepy sheeple. 

In other words, the herd is losing confidence in the con game and when the con is finally understood, the herd is going to be livid.

So how does loss of confidence lead to a financial collapse?  Simply because the stock market, banks and a large portion of the economy is a massive con as well.  Lots of people are doing jobs that nobody wants done.  Too many government employees doing nothing useful!  Also, the entire herd is now crowded (herded) into the stock and paper asset markets thinking Obe Ben Bernanke can  use the power of the dark side of the force in order to continue staving off global economic collapse.  He has huffed and puffed and he has thrown the kitchen sink at the situation but nothing is working.  Global manufacturing is in contraction.  Real wages are down.  Real employment is still elusive for the rank and file.  Massive numbers of people are on handouts - welfare, food stamps, disability, and yes I will throw social security and pensions in there too because people want far more out of those programs than they ever paid in and they don't understand that it is mathematically impossible to occur. 

Everyone thinks their little promise is sacred.  Screw everyone else over, they think, if you must.  But I want what's coming to me!  And I don't care if the value has already been stolen out the back door.  I want government to force someone else to work to get it so that it can be handed to me.  After all, I "earned" it.  Sound familiar?  If you think this way, you might be a sheeple.

Here is a little secret for you.  The Obama government's slogan has always been, "If we see something, we'll take something".  "We are going to spread the money around a bit".  Most people thought that they would be on the receiving end of that bull$hit.  I suggest that they will be on the receiving end of it too - but it will be like looking down the barrel of a gun.  If you have a pension promised to you, even if you are in the military, it will be "haircutted" to pay for the debt Ponzi.  And let me tell you something else: you will have no say in it and in fact (please forgive me for the truth I am about to tell you), you deserve to lose it.   Why?  Because you allowed the scam of fiat currency and fractional reserve banking to blind you to the reality of the situation.  You let the fun and frolic of the Grand Illusion fool you.  You voted for this government.  You didn't lift a finger to stop all the abuses.  You probably even ridiculed those who saw it coming (like Ron Paul).  Well, buddy, the wages for ignorance in this matter are to be patsified in this grand scam.  Don't get angry, you and me and we the people as a whole begged for it for decades.

 Please don't count on someone else to take care of you or to save you.  They can't even save themselves.  So just save yourself!  Before this collapse is over we will discover a whole new meaning for "Stabbing Westward" (Dear FBI and offiz ub der fadderland fer monkitering ub de Internetvolk, that was not a threat but rather the name of the band on the Youtube link - get a JOB!).

Buy silver and gold over time and leave Bernanke and the con men in the dust.