GE Update

I've very limited in time this week due to work responsibilities so I can't post as many charts as I would like but at least I want to show the GE chart because as GE goes so goes the whole market.  I'm sorry that the business end of this chart is so small but the 240 minute view shows the wave count in what I think are clear steps and when I begin to zoom it it starts to require more interpretation. 

Basically, it is a 1,2,1-2-3-4-5,3,4,5 move down that has not quite completed this sequence.  The 3rd wave started just above the top rail and in 1 240 minute bar it took out both the top and bottom rails of the triangle.  The only thing with that kind of power is a 3rd of a 3rd.   So this tells us where the DJIA likely is as well.  I think that 3 of 3 is likely complete or nearly so and that GE will kiss the lower rail now in a 4th wave and then one more wave down into 5 of [1].  I could be off by one small wave here as that is easy to do but I currently model GE's next move down to $24 as being [1].

Even though UVXY/TVIX have had nice moves up, there really is no panic seen in the market yet.  A growing sense of urgency is all I have really seen and it has been limited to a few sectors.  I mean, take away all of my annotations to the chart above and it just looks like sideways chop. My friends who don't know how to read EW will assign it no special significance and would probably say that all my GE charting predictions were just lucky because, as very smart as they are, they are ignorant in this area even though several have strong opinions about it.  I think this pretty much describes most market participants.  This is why Prechter calls the 3rd wave the moment of recognition.  This is when people begin to get fearful that something unexpected is happening.  Fear=higher VIX and higher put options prices.

In any case, I suspect there is a bit more southing to be had from GE and from the DJIA in wave [1] down still.  Then we should get a notable counter trend bounce into wave [2].  UVXYers should note that wave 2 is often times the strong vee.  It could pull back to $26 again into wave [2].  So this might be a good time to use trailing stops, etc. in order to give back as little as possible to the sucker's bounce on the DJIA. 

Attention put options players: this is a fine time for you to quickly review your fav 2016 out of the money puts and when wave 2 finishes then place your bets.  The 3rd wave down (even though it is only 3 of 1 of the new bear market) is where puts are just going to begin to come unglued.  As you can see, even with the minor pullback in the market so far, the puts are almost all green now.  Note: they use the bid price (which is usually lower than the last trade) in calculating the total % gain even though nobody is going to sell for the bid price right now.  If they used the last trade price then everything would be green except the JNJ 65s which would be break even.