General Electric update

Here is a back link to my previous GE post.  I think GE is a critical stock to watch because it is a microcosm of the debt based production model that defines the global economy.  In short, corporations got ahead by using debt based production and debt financed sales (vendor finance scam) in order to get much bigger than they ever would have gotten using plain old unleveraged hard work.  Early on the debt actually did buy more growth but, as the debt Ponzi grew, the returns began to diminish.  Companies like GE did not take the profits from the fat Ponzi growth years and store them for after the crash.  Nope, they consumed it all in real time for big corporate payouts to insiders, political "contributions" (and scam-ridden rulings lie "corporations are people too), etc.  So new GE has 10 billion in case backstopping hundreds of billions of debt as the economy begins to roll over.  GEe, what could go wrong with that?

But nothing is going to happen until the herd is ready to make it happen and the chart is how we track the mood of the herd.  So here is the GE chart.  That potential 4th wave that I thought might be happening several weeks ago has now clearly happen and it has broken out of the top rail.  I count 5 waves up there so it has not yet entered a large 3rd wave yet and in fact it may never do so.  It could be finished with the bull market here or this could just be 1 of 5.  So the red or blue paths are what we have to look for.  If the top rail breaks back down then the odds that red is happening increase significantly.  And if the lower rail of the triangle is taken out then the odds increase dramatically.  If we get a lower low than black 4 then the breakdown is confirmed.  I would be a market seller below the top rail and then cover the short above the top rail; it should serve as a clear pivot point for the next couple weeks. 

Until I see something compelling in the charts that would tell me to short, I will spend more time playing the swings on JNUG.  While I do not count it as the primary possibility, we have to be open to the fact that GE can trace out 5 good sized waves up that could take it to a higher high than black 3.  This possibility was clearly presented back on October 21st so we should not be surprised if it plays out.  It is the goal of the markets to wear everyone down.  If you are getting worn down waiting for the collapse to begin, just go to the sidelines and wait for that top rail to break down before getting back into TVIX again.  Trust me, there will be plenty to profit from on that play once the new bear market is confirmed.