Let GE be your guide

The wave count of the S+P 500 and the $COMPX and the DJIA mini-crash were not very clear during January.  Some of the Elliott wavers out there say it was 5 waves down.  Some say it was an a-b-c.  Well, it for sure was designed to confuse most people and that is just what it did.  Now that the $COMPX broke to a higher high, people assume it is all bullish from here. 

I always try to look for confirmation among huge players - those whose stock movements will influence markets.  That gives me good reason to circle back around to General Electric which I am on record many times calling it a fat, over bloated, government-backdoor-funded tub of lard, which is also a debt ridden, shadow banking, vendor finance scamming, war mongering giant waiting to possibly BK over the next decade.  The reason I think this is that deflation will make the government stop doing so much corporate welfare and without that GE barely stands a chance. 

Nobody thinks GE has a good chance of BK except me.  I am alone in my beliefs, as usual.  Well, that is, unless you count the fact based automated tools like Macroaxis and Z-score, both of which give a 64% and 80% respective odds that GE will BK in the next 2 years (leaving the tax payer to bail it out of course).  Why is CNBC, MSNBC, ETC. not talking about this elephant that is dancing around the living room in a ballerina suit?

Here is my last charting model post on it.  As you can see, I modeled it as still being in a down trending channel even though the shares had not shown any sign of down turn yet.  Below left is the chart reproduced from that post with different numbering but no other changes.  Below right is today's chart.  It might not seem much different but something important has happened.

In order to see it more clearly, let's zoom way in.  The chart below is just the last couple months.  The down sloping green line is the top of the predicted channel.  The shares briefly broke that line but have now come crashing back through with 5 waves down.  Despite stronger performances from the Dow, S+P and NASDAQ, GE is looking tired right here at the 50% fib.  GE has already tipped its hand that it has entered a new bear market. 


And so I finally get to the value of this post:  If GE was 5 waves down during January and now struggling to get back up to the 50% fib, could the Dow and The NASDAQ really be sporting bullish counts?  It's not that I am saying that GE will have the same chart as everyone else.  Clearly they are different.  But when GE begins a bullish new wave so will the rest of the markets (check the bounce for GE in 2009) and when the wave for GE turns long term bearish, how can the other players be doing well?  GE has its hands in everything.  If GE cannot make a profit off of its businesses, who in the heck is going to be able to make a profit?  A niche player here and there perhaps, but in general as the economy goes, GE goes.

This broader market rally that has been in play since 2009 is very long in the tooth.  Smart people will be looking for the exit IMO.