Sure banks will crash but we should be safe with commodities, right?

In short, no.  In the words of Prechter, during the coming crash that will be brought on by credit deflation, "It's all one market".  Everything goes down together according to him.

Well, if that's true then we should already be seeing the chart setup in companies like three M (MMM).  And so check out the recent chart of MMM below.  Uh-oh.  It looks just about like every other chart.  A supposedly stodgy, safe commodity company bottomed its crash out in 2009 just like the banks and everyone else and is now finishing up a clear a-b-c rally.  In this case, the 3rd wave is the extended wave and so per EW guidelines, wave blue 5 should be about the same length as blue one, which it is.  Blue 5 also follows a large triangle that is pretty unmistakeable.

 

This chart is telling me exactly what Prechter wrote in his 2002 book, Conquer the Crash (subtitled you can survive and prosper in a deflationary depression).  The key lesson is that there are no safe havens in the market from credit deflation EXCEPT perhaps the VIX which can be a timing nightmare.  The safe play is just to directly short any of these companies or to short the whole index via the SPY ETF.   Of course, the only real safe play is to pull your money out of the markets and out of the banks because in a crisis possession is 9/10ths of the law.  Unless you are prepared to enforce and protect your rights with the use of force, don't expect anything but a raw deal from your banking masters.

If you don't believe me just look around at what happened in places like Cyprus.  Money was stolen directly from accounts in order to bail in the banks.  Every banking deposit is legally considered not savings like you think but rather a loan to a investment organization which you authorize to go gambling with your money.  And get this part, in return you agree that they didn't steal from you because you got some thing of good value for your investment: FREE CHECKING AND ATM use.  That's right folks, these were not done in order to give you a break, they were done for legal reasons in exactly the same way that people will sell a derelict item such as a boat or a car for $1.  It shows intent to trade and thus brings the whole deal under laws that protect those who understand how contract laws work (i.e. NOT YOU and not me either to a large degree).

One final note: You can be right and still lose everything in the coming collapse.  For example, say you buy into put options or into a leveraged short ETF.  Direxion is the name of a company which runs a large number of leveraged ETFs.  What happens if a trap door falls open and the markets plummet like nobody has ever seen them do in history.  How can you be sure that Direxion or any other broker/market maker including etrade, ameritrade, etc. will have your money available for you if you win your bet?  How does anyone know that the whole damned system isn't completely bankrupt and that a series of margin calls to the brokers and market makers and leveraged ETF providers won't cause them to fold, taking your winnings with them?

In short, YOU DON'T.  Possession is always going to be 9/10ths of the law.  Don't go gambling with more than you can afford to lose.  Don't even have more in your bank or brokerage account than you can afford to lose.  Again, if it sounds alarmist of me then at least know that I am not the only one who thinks it is possible.  This chart is part of Elliott Wave International's financial forecast newsletter.  Don't tell on me for posting it ;  )  The point is that here is a financial analysis team that have made some very good calls in the past (and to be fair, have missed more than a few as well) who thinks that the coming crash of the grand supercycle wave that is finishing right now has implications that stretch to the very survival of the USA as a unified entity.  In light of this, does it still seem so impossible that some leveraged ETF providers and other stock brokers and market makers might go bankrupt in the process?  Remember, back in 1990 the USSR was a major global power until it essentially went bankrupt and broke up into core Russia and a bunch of x-stahns.  It has not been the same since.

For those to whom the term "grand supercyle" is just a meaningless buzz phrase, I hope this chart of the DJIA helps to provide you some clarity.  Expanding triangles that occur in the 5th wave position are bearish.  Those in the middle of the pattern can signal continuation.  The plummeting volume tells you which one this is.