Boeing collapse is picking up steam into its 3rd wave down as expected.

Here is the previous post regarding the ongoing slide of Boeing aerospace (ticker BA).  The model from that post is reproduced below, left.  Today's chart is lower right.  So far the model is looking pretty good and so I extrapolated further based on the waves so far.  The wave labeled green 1 is longer than the next wave down and so I can only conclude for now that the 3rd of 3rd will be an extended wave for BA.  This is shown in the red count.  The scale of the count is not as important as the shape but if black 1 was the first big wave down and if this 3rd wave is going to extend as I think it will then the overarching black 3 (not labeled below) should be significantly longer than black 1.  This implies that red 3 could go down a good deal more than modeled below (big gap down).

Keep in mind that all of this is happening despite supposedly good news on the earnings front.  In other words, the day to day news is not nearly so important to the market as people tend to think and nowhere is this more observable than at the major turns.  The market is actually forward looking and it sees something that it doesn't like and so it is trying to slip out of the rear emergency exit of the 777 while everyone is celebrating trumped up, debt driven earnings at places like Facebook.

Boeing is crashing because the markets know that the debt Ponzi is now reached its zenith and there is nothing but cliff diving to look forward to.  This is why I look mainly at the charts and only use the news for entertainment.  BA will not be entering its 3rd wave collapse alone.  It will fall in concert with the major indices.  They will fall a little and BA will fall a lot because they are still in their 1st wave down and BA is clearly in wave 3 now.

By the way, if you prefer to only go long, BA will finish 5 waves down and then have a nice a-b-c rally that is likely to be a vee.  Why?  Because those 5 waves down will really be a larger 1 wave down when taken as a group and that means wave 2 back up will follow.  2nd waves are often where people cannot believe the bargain they have been handed, consider the sell off irrational and plunge back in on margin.  That is how the vee gets formed.

While that strategy can work for the fleet of foot and mind, keep in mind that BA has entered a massive and historically significant bear market.  5 rail touches of an expanding wedge will most likely revert to the mean below the lower trend line in 5 large waves.  These expanding wedges tend to move quickly making BA a prime candidate for option-put buying.  Puts are not getting any respect still but believe me, they will start to gain momentum very soon.  People will see this big names begin to roll over left and right and they will begin to buy that insurance.  The puts they hated at 50 cents they will love at 3, 5 and 7 dollars.  It's always like this folks.  Wait until the S+P goes into a 3rd wave down.  The value of deep out of the money puts will suddenly skyrocket.  That's what happened in 2007-2007 and it will only be more dramatic this time because stocks will fall lower even though they are starting from a much higher high.