JPM update looks similar to my model.

In this post I indicated that JPM chart had peaked an ending diagonal and broken down below the lower rail.  At that point my model expected 5 of 1 to head down to about $53.  As you can see from the updated chart, that is just about where it bottomed.  It has since been on the slow mend but there is no conviction in this buying IMO.  It is just filling the gap and trying to a-b-c back to the prior 4th wave which is also about the 38.2 fib as you can see from the lower zoom in picture.

We will know that JPM is about to collapse in a 3rd wave down if it cannot take out the 38.2 fib.  I have my strong doubts about that.  The banks are all in deep trouble.  Nothing has been fixed, all of their balance sheets are capital impaired if the federal reserve loses control of the bond market and by my model, the dollar is getting stronger.  That means higher interest rates are likely not far behind.

Here is my dollar model using the UUP ETF as a proxy.  You can see in that post how I modeled that the throw under was done and that a break out of the top channel was imminent.  Fast forward to today and that is just what happened.  Look at how the chart broke out and then did a perfect back test - Prechter's goodbye kiss - before pushing upward.

Now, this is still a 3 wave movement so we only have 1st confirmation of the breakout.  It could take 5 waves up and then an a-b-c back and then a massive 3rd wave breakout before the market begins to believe that a real direction change is in.  But the fed has to unwind its balance sheet or at the very least not load it down any further with trash and so the banks will not be able to make free money just by making loans on crappy assets that are not nearly worth the money loaned (AKA all of the coastal housing in the USA).  In other words, the banks have been making the loans, taking in the fees and then giving it to the federal reserve to hold onto.  But if the fed can't take on any more of this crap, how are banks to make any money at all?

This is why they will plummet.  By using the federal reserve as a dumping ground for their bad loans today, they are clearing the market of all credit worthy borrowers and then cutting deeply into the non credit worthy borrowers.  If they want to continue making profits from their loan origination fees then they will have to add more crap loans to their own books. In other words, the city dump known as the federal reserve is closed for business and so new junk that they collect can't be so easily pawned off onto the taxpayer.

JPM is going to plummet well below $10 and probably below $5 before this collapse is done playing out.