Check out the whole banking sector - topping alert!

I just posted about JPM shares and extrapolated that they were probably near a peak and that they were probably a proxy for the whole entire corrupt banking sector.  In order to get some more data to support that I went to the shares of FAS.  FAS is the triple financial bull market ETF.  FAS bottomed at a split adjusted price of about $6-$7 back in 2009.  Now they are pushing $91.  Holy massive profits Batman!  It shows the kind of gift that Bernanke gave the banksters back in 2009.  There is no longer any need to wonder how the super rich get super rich.  They just get insider info and leverage up and away they go.

In any case, the FAS chart is very revealing IMO and it supports my view of a topping banking sector.  This also aligns with my views that liberalism is peaking and that new found conservatism is going to be bad for the leveraged financial crowd.  The government doesn't want to abandon this sector but they can read the tea leaves as well as I can.  They are watching things like A&E lose a major public pissing match to a bunch of Ducking rednecks.  Many other signs are out there that have already happened and others are on deck.  For example, the big flap about gay marriage is headed to the supreme court.  Had LGBT pushed this a bit earlier in the upswing of easy money and liberalism, they might have won that battle.  But now?  Now when liberalism is peaking in locked step with the fake Keynesian money supply?  I think their odds of winning are waning by the day.  Money does indeed make the world go around and the world has been going swimmingly for the liberal crowd not just during Obama's reign but also during Bush and Clinton.  The money supply trends transcend presidencies and in fact are more important than who is president.  As Amschel Rothschild said, "Give me control of a nation's money and I care not who makes its laws".

OK, enough theory, now the chart.  As you can see back in 2009 the banksters got a nice 5 wave burst.  Much of the money from that bottoming was made during that initial 5 waves, at least in percentage terms.  Then came the a-b-c downdraft into Oct 2011.  Next we should have expected either a 3rd wave or a C wave.  In either case, a strong movement was expected.  From $18 to $90 in 1 year is not so bad if you ask me.

Now, we could still get a throwover here.  In fact, it's possible that the 5 waves that I show as making up wave 5 are actually only wave 1 of 5.  But I don't think so.  I think the 3rd wave was the extended wave here and thus the 5th wave should be the same size as the 1st wave.  I currently see 4 peaks in that 5th wave so I would count it as (1) (2) 1-2-3-4-5 (3).  Thus we should see a small pull back into a 4th wave, and then another attempt to break out into a 5th wave.  But I think that 5th wave turns out to be a declining double top (failed 5th of 5) in order to form a nice set of owl ears up there.

As usual, small break above the upper channel followed by a break back down into the channel would be the first confirmation of reversal.  The second would come when the lower support line is broken. If that happens, the minimum retracement would be ~$62 (the level of the prior 4th).

I also want to call your attention to the volume.  Look at the massive panic selling as the banks were face planting back in 2009.  Volume spikes do indeed indicate trend direction changes.  Now look at today's volumes.  They are the thinnest seen in years.  Everyone who wanted to get on this train has already boarded.  There are people in every seat, people in the aisles, people in the baggage compartment, and people on the roof of the train.  There are even people sitting up front with the conductor and people hanging off the sides.  There is simply no more room for any more suckers to get on this train. This train is about to go south IMO and many will be those who get run over by it.  The banksters are peaking.  Wall St is peaking.  Liberalism is peaking.  They are all interrelated.

I almost hate to mention it because of the obscene leverage involved but there is a counter part to FAS.  It is called FAZ and it is the triple bearish financial sector ETF.  There are two ways to play the coming banker melt down.  Either short FAS or go long FAZ.  Shorting FAS is actually a more conservative play.  The most you will be able to win is 100% of your bet.  Given that FAS has run so far for so long, upside percentage losses will be small and you can easily stop yourself out for very small percentage losses if you mistime your entry.  In addition, these 3x funds are operated using options and options have time value.  So gravity is always in the favor of the short seller on them.  They will all eventually go to zero over time.

On the other hand FAZ will be more volatile but you can never lose more than you bet.  I plan to bet a little on FAZ and to dollar cost average into it.  I'm hoping it will be a lot of fun but in any case it will be a learning experience.  May the odds ever be in your favor, fellow gamblers.