[JPM] update - sell the banks!

JPM is obviously a good proxy for all of the banks and it's chart is screaming "short me".  Again, if you are a "fundamentals investor", click away from this page because I have no idea what the current supposed fundamentals of JPM are.  Of course long time readers will also know that I don't think normal people can even know the fundamentals.  I mean, if fundamentals are so obvious then how did AIG just "suddenly" miss profit expectations by 67%?  By that I don't really mean what the mechanics of the failure were.  I mean why was it a surprise?  AIG is not what people should think of as a dynamic business!  It should be a slow moving, highly predictable enterprise, especially now that it got US government bail out and has been under supposed adult supervision since then.  Perhaps the real fundamentals aren't really even known by the insiders (i.e. what the herd is going to do with its debt).  Before I go on I want to point out that 2017 out of the money puts on AIG are tres cheap for all of the reasons I just mentioned.  Everyone thinks there is no risk now that adult supervision has been in control.  All I can say is "yeah, right".  Risk is again being wildly underpriced there.

OK so back to JPM.  In the backlink I modeled one more wave down to finish wave 1.  The logical expectation at that point would be for an a-b-c retracement.  If the first wave down is wave 1 then a deep vee pullback should be expected because that is often what happens to the first wave 2 following a major trend change.



Since that post the shares did finish wave green 1 down and then the buy the dip crowd bought it back up as if in a panic.  Look at that unicorn horn on the top there leading to a very deep vee green 2. 

• BTW, that could have been a single trade in AH for all I know but it still has to be counted.  I have found over time that there is no data that doesn't matter to these charts.  You can't ignore low volume extended trade data in your EW counts.  Data is data.

Did I mention that I love FAZ here?  Yes, I think I did!  But I want to say it again for the cheap seats: FAZ has very, very likely bottomed and the recovery bounce should be fast and hard as these banks begin to miss their profit estimations (or worse).  AIG is not in a vacuum.