Short term assymetrical bet against GE.

I think GE has entered a new bare market.  As such, market participants are likely not aware of this yet.  They likely see the recent pull back as yet another "buy the dip" opportunity because they did not factor in the invisible force field created by the upper channel line.  You might not be able to see it, but it exists in the algorithms of every trading computer out there.

Here is the long term chart of GE showing the next major support line.  That horizontal red line is what mosts interests me.  I think that line will be tested by the now-forming wave 1 down. 

Zooming in, here is the 480 Minute chart.  Note how steep that first wave down was.  Someone wants out of this Ponzi.  Note I think that 3 waves up to wave 2 are not complete.  If this model is correct then we should see a massive break down into waves 3, then up into 4, and then 5 tests the support line, probably a lot sooner than the end of April (end of April is drawn hastily below, just to show the wave shape).  In fact, I think it gets down there by the start of April.  There are a couple reasons for this:

• That 1st wave was very powerful.  Power, in terms of wave movement, is measured in steepness, total units traveled, and time taken to travel.  A powerful wave can either be steep and long or it can be shallow in slope but over a long period of time.  If that was wave 1 then wave 3 ought to be a doozy with the 3rd of 3rd showing some cliff diving which is how the market tells us it recognized the threat.
• I expect this year to be a "walk away in May" year, namely because of the January effect and also because of Art Cashin's statement that stocks almost went off a cliff which tells me that a cliff is coming and Art knows it.  GE will need time to bottom into wave 1 and then do an a-b-c sucker's rally into wave 2 before having really crappy earnings and forward guidance at its next reporting opportunity which will kick off wave 3 down.  That horizontal red line has been support/resistance pivot point since 2003.  It will require the power of not just a 3rd wave, but the 3rd of a 3rd in order to break down.  That's why I think wave 5 of 1 down will kiss it and then bounce.

That is a good deal of speculation but it is educated speculation, not just gut feel and so the odds are increased.  When the odds of winning go up, a smart gambler will make a bet.  Even smart bets don't always win so I will keep the amount low since I plan to play it asymmetrically.  The following chart shows the setup.  It shows 5 waves up from the recent bottom.  That would normally indicate A of C and in fact it might mean that this time as well.  But since it is an expanding triangle, it could also count as the full retracement and that is what I will be assuming here, mainly because I think the broader markets are heading to the bottom of their diagonal.

I expect an early morning small pop in these shares to form 2 of 3.  Then on the 3rd of 3rd they should break down the lower support of the expanding triangle and signal that the retracement from the lows is over and that we are heading for the next wave down.

I have targeted some GE puts that I think I will roll the dice on tomorrow.  I don't want to fight any readers for them so I will only post the ticker after I buy.  I only plan to buy a few contracts since this is such an asymmetrical bet on a single stock.