DJIA update and stuff.

Yesterday's DJIA update was entitled "DJIA is likely peaking".  It was accompanied by posts about GE and others, all with the same message: the wave counts look ready for a reversal downward real soon now.  Today the Dow was down 161 points which is a nice move, but hardly anything unusual.  Look at all the similar moves that have happened in the DJIA since the latest phase of the rally began in February.  But none of those other moves produced the kind of reaction we saw in the VIX/TVIX today.  The last time we saw this kind of panic was back in January where TVIX almost doubled going from 6.25 to 11.75 in just 4 trading days only to collapse to lower lows thereafter.

Today's move could be the start of "the big one" or it could be the pause that refreshes the rally.  But the evidence is piling up against the latter theory.  In the comparisons above, the "senior" index of the bluest of blue chips (i.e. the mere 30 stocks of the DJIA) was mainly responsible for the overall view that "markets are still going up".  The NASDAQ composite and the S+P 500 charts started showing bearish divergence around early July when I called the exact top of the S+P 500 (at least to date) declaring that "the rally that began in 2009 is over" based on a detailed wave count I presented therein.  For the record, I also emailed the link to that post to all four of the major Austin news stations telling them that if they are having a slow news day then they should take a look.  Of course, nobody contacted me about it yet because it just seemed like I was another loon in a herd of loons.  I plan to remind them about it in 60 days.

If the DJIA falls below the support line that I drew in above then I think we will begin to see some real market fear begin to take hold.  Unfortunately, jobs will be lost in the coming carnage (such as 18k job cuts at MSFT just today) and lots of people will not have seen it coming.  They will have just bought that new house or new car or new whatever on credit.  You want to know what the saver's revenge will be?  It will be picking up these houses and other toys at once in a lifetime bargains as the banks will finally have to mark their unsellable crap to market and then liquidate it for whatever it will fetch.  I expect everything to take a whacking: car prices, home prices, prices of you name it.  Game consoles and guns and boats and whatever else you can imagine will be blown out the door on the cheap as the deflationary collapse plays out.  Banks will be required to liquidate their "illiquid" (a code term for "nobody has the credit to buy or the desire to buy even if they do have credit") asses.  I mean "assets".  Check that.  I mean both.

I also expect to see several big name banks and financial institutions go BK along with associated bank runs and bail ins to happen in the US accompanied with, of course, rising social unrest and more.  These are just the withdrawal symptoms when a nation has to go cold turkey off that psychologically addictive drug known as credit and debt.  You don't need to be a visionary Nostradamus in order to see these things coming.  All you need do is understand the following:

• Fiat currency and fractional reserve banking are fraudulent practices which the educated but otherwise pretty useless elite use as a weapon which causes the hardworking and productive but economically ignorant population use their own labor to put the elite up on a pedestal for worship.
• The old saying "it is better to have loved and lost than to never have loved at all" does not apply to the money supply.  People who once had something which they subsequently lose due to the fact that they mistimed the pump and the dump of the pump and dump money supply tend to step off tall buildings or otherwise do stupid things.  As Gerald Celente constantly reminds us: people who lose everything tend to believe that they have nothing left to lose (even though their life itself is the greatest of all gifts!) and so they "lose it".  Do not expect unreasonable people to treat you with respect or fairly.  Do not live in fear of this!!  Arm yourself and become proficient with your firearm.  All men might have been created equal in the eyes of God but Samuel Colt made it actually so in a face to face altercation.
• Nations which build up infrastructure based on debt instead of on production borrow their prosperity from others instead of earning it themselves.  Big infrastructure comes with big maintenance costs.  When the con men lose the ability to borrow more in order to pay the maintenance costs of what was previously built on debt then the infrastructure will crumble and fall.  When State Farm Insurance commercials suggest that you "Get to a better state" they mean it literally.  Go somewhere like NOT New York and NOT New Jersey and NOT California and NOT Illin-noise and NOT anywhere else where the desires of government have become more important than the real needs of the productive portion of the population.  Stay out of big cities where the "it takes a village" crowd breed like cockroaches.  It does NOT take a village.  It takes personal commitment to caring for oneself in order to succeed.  Seek self-reliance first and THEN interoperability with others and not the other way 'round.
• The old rules which have been forgotten were rules of olde for good reason: they were proven over and over again.  The fake money-driven nanny state's propaganda machine has tried to change the old rules.  For example they tell us that:
•  ...the banking system is safe and sound when in fact I know that possession is 9/10ths of the law.
• ...you are a conspiracy nut-job if you don't agree with the status quo when in fact I know that independent thought is what separates man from sheeple.
• ...gold is a barbarous relic when in fact I know that gold is money and nothing else is (an old guy name of J.P. Morgan taught me that one).
• ...big government is there to protect us when in fact I know that big government is in it to win it for itself and that it is a parasite which feeds off of the labor of the population in order to survive.
• ...you didn't earn that when in fact I know that yes I fucking did you SOB traitor bastard of a president.
• ...gold is a bad investment because you can't eat it and it produces no return.  Well, they got me on that one.  Gold is a horrible investment because it is not any kind of investment at all.  Gold is money.  It serves pretty much no other purpose anywhere on the planet while in fact being the common money of the entire planet.  Take dollars to Brazil, Africa Japan, Europe, Australia or China and try to buy something.  You will get laughed at or worse.  Now do the same with gold.  You will be lucky not to get mugged for your heavy metal.  Everyone wants gold.  Everyone knows what it looks like and how to figure out what it is worth.  Paper currency?  Not so much.
• ...your money should work for you when I know that only people do work.  If your money is used to make more money then you are gambling.  That is not always a bad thing but call a spade a spade.  There is no risk free investment in the best of times and in the worst of times there is almost no investment that carries acceptable risk.
• ...people with guns are "bitter" when in fact I know that people with guns are the true enlightened, self supporting patriots who government is afraid of while people without guns should legally change their names to Mark and Patsy.  Those with guns strengthen the nation merely by the fact that government knows there are x hundred million firearms in the wild.  It is only the credible threat of being able to defend oneself that stops criminals, including organized criminal factions of the government, from waltzing in and taking from you whatever they want.  If you own a gun then you are doing your part in this.  If not then you are letting someone else pull your weight in this hefty matter.
•  ..."now that Obama is in charge he plans to "spread the money around" when in fact I know that exactly the opposite happened: we have the greatest concentration of wealth in the fewest hands in the history of the planet.  We have the biggest wealth divide (income inequality) as a result.  Also, those who got wealthy under Bush and Obama and Clinton and other complicit presidents going all the way back to Ike are not the producers but rather the banking parasites.  The money will actually get spread around as the debt Ponzi continues its ongoing collapse and the naked short on human labor known as fiat currency and fractional reserve banking receives a margin call resulting in a massive, massive, historically significant short squeeze.  Furthermore, I know that there is not a damned thing any of the con men can do about it because once the con goes bust it cannot be re-run easily on the same group of victims.  It will take another whole 100 years or more before the coming pain of the bust is forgotten.