[DRYS] looking interesting again

I dabbled in DRYS for a very short time recently, got stopped out for a 3% loss and then let it continue falling since then.  I can't be certain that the mid 60 cent range was the bottom.  That was clearly 5 moves down following a clear 4th wave HT so it could have been the bottom but if it does not continue fleshing out 5 waves up per the green over the course of tomorrow and Monday then I think it could see 50 cents.  But whenever 5 waves down is down I think it is a strong buy because when it reverses the percentage gains should be very worthwhile. 

Not that I put too much value in "fundamentals" but DRYS has been sold off as if BK is imminent and I just don't see that happening soon.  Yes it has a shipload of debt so to speak but it also has $566 million cash.  Now look at PS of only .21!  And PB of .15?????  Even with a very conservative 50% haircut in asset prices in a breakup sale, this is worth 3 times its current market cap.  Either that or George E is cooking the books big time.  That PB number is probably the lowest I have ever seen in my life and that is saying quite a bit for someone who follows the stock market as closely as I do.  Price to book is perhaps the truest measure of real value of a company. The only question is, who did the appraisals...



In any case, I will be back into DRYS if we get 5 small waves up and then 3 tiny waves back as depicted by the green path.  And if we get the red path I will be following it down very closely waiting for the final EW motive sequence to finish.

[UVXY] update [IBB] [JWN]

At the backlink I put my money on a rising share price for UVXY but today's crappy little 4.78% gain at the close was anything but convincing yet.  While the red path would create the most satisfying wave count, it would also likely extend past the end of the wedge vertex and that is not usual.  So my primary path is green but I still just don't see any real conviction buying of stock crash insurance yet.  I would have thought that a 1.64% drop in $COMPX would elicit more of an upward move in UVXY than we saw.  Maybe it's the calm before the storm.  Either way we will have our answer in just a few short trading days.  I'm using a fairly tight stop of just 2% from today's close to bail on half of my UVXY.

One of the reasons I am betting on UVXY is that one of my canaries in the market fear coal mine has been breaking down.  See the chart of IBB below.

Likewise there has been some selling in Norsstrom's but nothing that resembles anything more than a healthy pullback at this point.  For all we know at this point, the move down could still be an a-b-c retracement.  But again, I think not.  I think the panic will materialize soon.  Look at the aftermarket collapse of LinkedIn (LNKD) today.  You sit through a bull market only to have the trap door open under your feet for a 20+% overnight loss and at some point you have to stop believing that there is anything like fundamental valuation of markets.  It's all just one big casino and so many people have no idea how crazily the money managers are gambling with their money.

[$COMPX] update

The real chart extended a bit past the backlink model's expectation but we still have a 5 wave rising wedge which has just broken the lower rail.  If this can break back up into the channel in the next day or two then perhaps the market can extended this rising wedge a bit further but I think that is a bit of a stretch at this point.  I think the very best that the market will be able to do is to use this wedge as W3, then pull back to the 4600 range for wave 4 and then spike one more time into Q3 where the cold weather has historically put a chill on markets. 

That's best case IMO.

Expect law enforcement to begin doing its job.

One of my long standing themes is that while the Mammon Money (AKA debt) was ruling the world in an upward spiral of fake growth, it was easy to buy loyalty.  But that loyalty was as fake and as temporary as the currency used to buy it with.  When the payoffs began to die off, government employees began to value their jobs again and no where will this be more true than with respect to Wall St. "regulators".  They have, in fact, been co-conspirators in the rip off of the working class in the history of man.  But they see the writing on the wall, just like police are beginning to see it, and they will begin to start enforcing the laws again.  Not because they suddenly turned honest mind you.  More likely because they are now worried what the pissed off people are going to do to them when the Ponzi collapses.

Today's new evidence is reported here by Reuters in which two scumbags were caught "spoofing" the gold trade over at the CME.  While the penalty was just a bit of a hand slap - two months banned from trading, the article noted that "The CME's action is notable for its swiftness.".  The status quo of the past has been to drag the feet and see how much of a kick back can be extorted from the criminals.  Now I think justice will be much swifter as the regulators have become afraid of getting caught themselves.

These messages are being sent out into the herd and they are rippling across in waves, impacting every mind that perceives them.  This changes the actions of the message recipient who in turn influences others by their actions.  You know, herding 101.

I think that Q1 was bad and Q2 was a total bust economically at the global level.  Whereas we were being told about June rate hikes, the fed has now pushed that out to September.  We'll see if the bond vigilantes put up with that crap but I think not.

Still waiting for my 500+ point DOWn day.  I know it is coming soon.  On a personal level, I got hired into a new job and then just 2 weeks later I am now seeing that they have a hiring freeze.  Buckle down and keep your jobs folks because this is a game of not so musical economic chairs and anyone standing when the music finally stops will be well and truly fucked.

200K total pages views just hit. [PVIEW]

Backlink.

Yes, I was sitting here for about 10 minutes waiting for it to hit once I noticed that it was very close to the 200k mark. Again, it is a drop in the bucket compared to popular blogs but it's still rewarding to see. Thanks to all of you who have helped with this number. 

[Hillary] tries to move right

Correctly reading the tea leaves, Hillary has begun addressing the over criminalization of nonviolent crimes.  Too many people are being sent to jail for too small of a crime.  And, of course, minorities typically bear the brunt of it.  Hillary has never given two shits about this before but after the recent riots she was at least smart enough to finally see that there was political advantage in doing this.  I don't bother reading or listening to Hillary because she is nothing but an elitist liar who will never follow through on her campaign lies, but at least she is saying the right things.  The article quotes here as wanting all police to have to wear Tyranny cams and also cutting off federal funding which has been supplying "surplus" military equipment to small city 5-oh.  I have written that the surplus military equipment scam would die and others will climb onto Hillary's BANd wagon in this regard.

Now the only challenge will be whether or not the public falls for yet another lie from yet another lying Clinton.  I suspect this will be a much bigger challenge than she currently believes it to be.  She thinks everyone has already forgotten her missteps.  I think they will remember in time for the ballot casting.

Texas Gov Abbott tell Texas State Guard to monitor US federal military exercises.

OK this should tell you how suspicious people have become about federal exercises in populated areas.  It's now to the point that the state military arm will be monitoring the federal military exercise known as Jade Helm.  Below is the official logo of that exercise.  How do you like their little slogan, "Master the Human Domain"?  I have two words for Jade Helm: FUCK YOU!  You bastards are NOT the masters.  You are public servants.  I have zero tolerance for any fascist military asshole who is telling me that he will "master" me.

Oh, and don't overlook the central element in the logo.  Yes, I'm talking about the semi transparent shoe.  Actually, it's a wooden shoe / clog which is known as sabot and is widely believed to be the basis of the word sabotage.  The wooden shoes, so it is told, were thrown into the workings of factory machinery to break it by workers who were forced to work for their masters in horrible working conditions.  So Jade Helm is essentially an exercise in dealing with domestic saboteurs who don't like tyranny.



First of all, a shout out to Gov Abbott for his courage in this matter.  It's rarely politically beneficial to be the first to do anything but what he is doing is a first and it is being done in direct response to Texas citizens being worried about US federal government oversteps.

Said differently, the federal government is losing its power over the regional crime bosses.  Yes, I voted for Abbott but while I applaud his recent move (as well as things he said and did before the elections), he is still probably nothing more than a crime boss because you pretty much have to be one in order to get elected.  Also, he has not been cracking down on government crime in TX, things are running about the same now as before.  It's the federal government that he seems worried about.  Probably because he knows that they are jonesing around for more power and control in his back yard.  In other words, government infighting, just like I predicted would happen.

But the enemy of my enemy is my friend so I will continue giving Abbott the benefit of the doubt as long as he keeps the feds at arms length.

In any case, this is more important than it looks at first blush IMO.  When internal military forces are used contrary to other internal military forces, well, a house divided against itself cannot stand.  For all I know, Abbott has dreams of becoming the president of the free and sovereign country of Texas.  Don't laugh folks, the level of systemic economic collapse that awaits the USA clearly supports the potential for the partial de-unification of the USA.  Remember, it happened to the USSR already and we really are no better than they are at the end of the day.  We're just a little higher up the pyramid due to ownership of the world's reserve currency and we used this fact to maintain our hegemony.  Don't expect that to last forever folks.

If Abbott pitched Texas secession on the idea of renouncing federal debt and then moving to an honest, gold backed money supply then he would have my vote AND my armed support if needs be.

[CJES] update

The oil patch has been on a tear but I would not buy the peak because the bounce seems corrective to me.  I now model this as a 4th wave rising wedge (WC4) which will likely fill the gap as shown with its corrective bounce to the level of the prior 4th.

I suspect this will throw over, break down both the upper and lower rails and then put in a real bottom with a 5 wave move down.  Caution is clearly indicated until such time as we see something motive play out.  That could still happen but the wedge shape decreases the odds that it will IMO.

[RUSL] likely to break down

In the backlink I warned that RUSL would likely either break or break down.   Here is the model from that post:




Well, resistance is holding and so I'm going to label it bearishly at this point.  There are more than a few things pointing to this model.  The main thing that should scare any EW tech is the 5 rail bumps into rising wedge with throwover.  Then it fell back below and has so far done an a-b-c recovery to kiss the lower rail from below.  We also see the island reversal circled in red.  I do not get the sense that we will see a lower low here.  I bet it is a failed 5th.  But of course, what really matter is that we get the 5 waves down.

If this breaks back out the top rail then all bets are off on this model.  Once it bottoms with 5 waves down then it should be a very strong buy again.

[USLV] update

At the backlink I was modeling an imminent 2nd wave bottoming.  I've actually been holding JNUG since that post.  New job does not have the same flexibility as the prior one and so I'll be doing less posting and less trading in general.  In any case, it means I cannot sit there and grub every penny out of a trade like I could before.  I'll be forced to have wider stops and catch more general trends.  But the strategy will be the same: stay in cash until I get an entry supported by an EW model and then use stops if the model breaks.

In any case, below is the zoomed in model from the backlink.



Below is the current zoomed out snapshot.  The main delta between model and actual was that actual contained a deep vee 2nd was put in which then formed an inclining double bottom.  As I have pointed out many times on this blog, the initial 2md wave following a trend reversal is often a deep vee and so if I had had more time to think about it I probably should have modeled a deep vee there.  In any case, I did not get shaken out of JNUG.

If this model is correct then we should see USLV begin to move up sharply in the next few trading days.  I like USLV a lot at these levels.  JNUG will not likley trade much different than USLV in aggregate.

Initial bounce target is a window in the $55 range.

[UVXY] update

Today's chart is still within acceptable tolerance of the model at the backlink which is reproduced below.




The red or green paths are still both possible but each day that goes by the herd has to decide whether to extend the falling wedge (which is still possible) or to finally be done with it after all of this punishment.  Extending this wedge will be difficult at this point so I am on the lookout for either a sharp and final dip to $8 before breaking back upward sharply (red model) or a breakout as soon as this week (green model).

It is quite rare for wedges to just keep meandering beyond the point of the vertex and that day will be upon us in a matter of 5 to 6 trading days.  A word to the wise: volatility is not dead.  It is simply laying a huge trap for the overconfident longs.  When this baby finally arrives it will likely do so with shock and awe because that is what will get the herd moving in the intended direction.

[TWTR] update

In the backlink I provided the model below.




Here is the real time update, zoomed in a bit relative to the weekly scale above (daily scale below).  This move since green C can be counted as an a-b-c and the herd certainly knew that the lower rail was there.

Just because this wave played out exactly per the model, that does not mean the rest of the model MUST play out.  EW is about odds and not about certainties.  But long time readers have certainly seen by now how accurate EW can be and how powerful it is even if the model is wrong simply because you know very quickly it is wrong.  For example, I called a peak at green C.  That means sell.  Now I model a support point here, that means potential buy.  But it also means if this breaks below the lower rail then it becomes a sell again.  So you can just set stop loss at 50 cents below the lower rail and come back in a week to see if you got stopped out or if it's headed back up to $52. 

Personally I think it will need a 3rd wave to break down that support and as you can see, it just had a 3rd wave collapse that could not break the lower rail down.  You very, very rarely get a gap down like this that cannot break support one day only to gap down the next day and break support.  And of course gaps down are the only fly in the EW strategy and even then probably only a 5-6% risk in most gap down cases.  I do think the odds side with another wave up into green E but if the DJIA suddenly breaks down, TWTR will go with it.

My long term view is that TWTR and most other social media stocks are essentially worthless and will all trade sub $5 in the coming years as people stop wasting their time with online social media crap and get back to work.  And why do I think people will have to get back to work?  Simply because we currently borrow most of our living from others.  That is what it means to have run the national debt up from $8 trillion at end of Bush 2 to $18 trillion today.  When we can no longer borrow our national living then we will drop all of our unproductive pasttimes like TWTR and FB and get the F back to work.

[PBR] update

At the backlink we had only seen 3 waves up off the bottom and so I recommended to use stops and not give back the gains made until that point should the recent move turn out to be corrective.  Since then it has been made clear that this is a motive wave.  Wave 1 or A up is complete but I am looking for more down side to the wave 2 pullback.  We really should see something nearer to the 38.2 fib get hit.  But then we should expect a powerful next wave up as 3 or C plays out.  I have noted that when the shorts really need to cover that they can't usually wait for the full 38.2 fib to occur.  So if my current model is correct, we could see a bottom into the $8.40 range before the reversal.  Of course, wave count always trumps price targets.  When we see a-b-c that is made up of 5-3-5, time to buy.

Note, if this does not go any lower, I could be off by 1 wave.  Red 1 might really just be 3 of 1.  We should know the answer to this in the next 1-2 days.

Abercrombie & Fitch to drop sexualized marketing [ANF]

The week's conservative wave proof point comes in the form of a formal policy change by ANF management.  You can read the details here for yourself but the bottom line is that they are not changing because they realize that what they were doing was scummy.  They are changing because the money is drying up.  Period.  It is the decline of mammon money that is directly leading to the decline of liberal behavior folks.  The proof points keep on rolling in. 

Even Mish is talking about police abuse.

Mish rarely if ever strays far from his usual schtick but in today's post he tells you just what the herd is thinking regarding police abuses.  In short, the window of tolerance for this bullshit is closing like a guillotine falls.  In other words, rapidly.

[TWTR] update

Things that make you go hmmmm.

[RUSL] update

Note: This is written from the hotel bar after a long day of training at my new job (no I do not work at a hotel ; ).  Double Captain Morgan [of course] and diets are flowing.  You have been warned...

At the backlink I provided the chart below.



Current chart is below. While you might think I would be happy with such incredible model price correlation, I'm worried because the shape of the chart is not as expected.  The plunge looks motive  not a-b-c corrective and the move back up so far:
a) looks corrective and
b) is up against significant resistance

Both of these views are better demonstrated using a slightly zoomed out chart per below.  Look at that gap down that gapped just below the top rail and then a-b-c'd its way back up to kiss the upper rail from below.  Not bullish folks.

Because of this I would be a seller at today's close and be looking for a big move down as shown.  But if that happens, buy buy buy as Cramer would say.  Also, if this can break out of that top resistance line instead of breaking down as shown then it would be a buy on any pullback that remains above the top rail.
 

[UVXY] update

Really not much new to report on this front relative to the backlink model shown below.


Below is a zoom in of just the big wave down that started mid Jan.  Looks like there should be a few more days of pain, probably into the end of the month.  But then I will be loading up big time on UVXY.  Again, no matter how low they take it, the target remains the level of the prior 4th, minimum @ ~$20.  There is a small chance that the small wave down here at $10.50 will be counted as 5 of 5 instead of 1 of 5 but that is not my primary count.

Cop who goes out of his way to NOT shoot a perp

Under the liberal rule of things, cops would go out of their way to shoot anything or anyone they could.  If you didn't respond to their commands immediately or fully, they might shoot you.  If their gun was more handy than their TASER, they'd shoot you with the gun.  If they thought that pack of cigs in your hand was a bazooka, they'd shoot.  And not a warning shot, not a leg shot and never just one bullet.  This was the real kicker that they were intent on murder.  When they would shoot, it was usually a clip dump opportunity for them.  8 bullets would leave the gun if just one corrupt bastard of a cop was involved but if you had 3 or 4 corrupt bastard cops then they would send 40 bullets down range.  Did it matter that they were shooting in a residential area?  Of course not!  After all, the guy with a water bottle in his hand was a real threat that had to be put down (so that he could not sue in court...).  So what if a few kids of useless eaters might be put in harm's way?  Even your pet was not safe around these insane, testosterone-pumped assassin cops who had been brainwashed into thinking that no life except their own had any value. 

Fortunately, recent events continue to provide more evidence that those days are rapidly ending.

Today's proof point comes in the form of a cop who really could have taken a man's life with no question.  The citizen clearly wanted to be killed and he kept on aggressively advancing on the cop hoping that the cop would kill him.  Instead, the cop kept backing up and in fact eventually fell over on his back and was pointing his gun up at the citizen who eventually just gave up and laid face down so he could be cuffed.

This cop should be applauded for doing every single possible thing he could do to avoid pulling that trigger.  I would have given him credit if he had just shot one at the legs.  But he didn't end up having to shoot at all.  I wonder how much of an impact the recent troubles that police have been having with the people factored into his decision.  But regardless of why he did it, we are now seeing cops not only get in trouble for shooting when they didn't need to, we are also seeing them get praised when they didn't shoot when he could have.  The cop in this story is not being called a coward, instead he is being hailed for showing great restraint.  These are the messages going out across the herd.  Soon we will see cops getting awarded points and faster promotions for finding nonlethal resolution to difficult problems.

One more thing: all cops should be required to wear body camera.  Period.  They should be fired from the force for insubordination if they ever engage in a shooting without that body camera recording.  This is how the cops are going to be put back into line.

In any case, my congrats go out to the cop in the video for not being a murderous bastard.   Amazing when we live in times where anyone would ever need to receive that kind of praise but these are the times we are living in.

Like I said, the truth is going to come out.

I've read a lot of documents and seen a lot of videos regarding the 911 controlled demolition but I always wondered why the real experts (those who work at CDI -  Controlled Demolition Incorporated) were not all over this.  Turns out that testimony from an actual CDI employee has been out there for some time now and just lost to me in the noise until now. Check this out.

Importantly, look at the likes vs dislikes of this video: more than 10k likes vs less than 1k dislikes.  In other words, the herd is not as fooled by 9-11 bullshit as some might believe.  This is why we should not be surprised when it all comes tumbling out onto the floor.  The pent up pressure for the truth here is much higher than it might appear at casual glance.

The only new thing under the sun is the history you dont know.

People toil their whole lives and then at the end of them wonder why their retirements are paltry or non-extant even though they worked long hours and expended considerable effort during their working years.

In a world where there is so much apparent prosperity, why should anyone who actually works a full day and a full week and a full month at any productive endeavor ever go hungry or live in poverty or be unable to pay for their own healthcare or be able to live out their twilight years in some sort of reasonably comfortable existence?  Why should any such person ever be lowered to having to accept the false charity of government sponsored food and shelter?  How is this even possible?

The answer is so simple yet made so complex because it behooves those at the top to keep it complex.  By talking about the symptoms in endless detail, the powers that be confuse and mentally tire those who are better with their hands than with their logical deductive minds.  In this way, good, well meaning, hardworking people remain in a perpetual state of confusion even though each of them, blinded by their ignorance of the truth, have strong opinions about why things are broken and what should be done about them.

As I take on a new job, which starts essentially today, I will likely have much less time for this blog.  Updates and detailed charts will have to be scaled back, at least for a significant number of months, as I refocus my energies into my new work.  Since a main function of this blog was to educate people I want to remind people, as we see significant negative events begin to take hold at the global level, that what is happening and why it is happening are faaaarrrrrrr less important than HOW it is happening.   You cannot change things going forward simply by knowing the first two elements.  It is only by understanding how the negative events have transpired that we have any chance at all of stopping more of it happening in the future.  That which is going to happen must happen; there is no undoing the fact that the world is near the brink of a major economic collapse for it has been put in place by design while we the people slept.  In cannot be undone at this point; only endured.  The only thing we can do is to disallow the con men from using the collapse and the attendant panic as excuse to continue to enslave, or more to the point, to enslave us to an even larger degree, after the collapse.

Only by shutting down the energy source of the negative element of society will the corrupt elite ever stop or even reduce its negative influence on the global population.  The only energy source they have to remain in control of us is the power of a corrupt money supply which allows them to quietly steal from the masses to enrich the few.   It is through the implementation and maintenance of a corrupt money supply that the very labor of the people is twisted into becoming the mechanism of our own decline.

By pumping up the debt portion of the money supply they incentivize people to work harder than is actually needed in order to live comfortably.  People begin to chase acquisition of the money instead of chasing the traditional things valued in life such as family and honor.  The labor of the people thus turns raw materials into huge amounts of capital (i.e. any form of wealth from real estate to cars, etc.).   But the price of this capital is also chased up by the expanding money supply such that if those who built the capital want to enjoy the fruits of their labor, the can only do so by taking on massive amounts of debt.  Please consider the insanity of working all your life to build something only to have to take on endless debt in order to posses it!


Then, once the pump cycle is complete and people are no longer able to take on more debt, by collapsing the credit the elite money changers cause those who took out debt to acquire control of these assets to lose control of these same assets back to the corrupt banking system.  When the cycle is complete, the people did all the work yet the financial elite end up with in their legal possession all the real wealth.  In order to re-start the cycle, many of these assets actually have to be destroyed.  This is why the bankers then foment war.  The elite call this the cycle of creative destruction.

If the people ever wake up and realize that most of the world's corruption, violence and immorality will be directly and negatively affected by the elimination of the fraudulent, dishonest money supply, then the shadow government which is really in control of the world's nations will collapse in very short order leaving the people once again the recipients of the fruits of the labor which they exert.

Forget everything else, it's all noise and distraction; a socioeconomic flash bang grenade if you will.  Excessive, useless, misleading detail is designed to stun and confuse the simple minded people while the real terrorists, who wear fine suits and live behind granite walls economically rape and pillage the unsuspecting population.

For those laboring under the misimpression that my views are anti-capitalistic all I can say is that in order to have capitalism you first have to have capital.  Debt is not capital!!  We labor under a money supply that has no capital in any way associated with it; it has no backing, it is all just debt notes.  We have not known capitalism in the USA for 100 years.  You cannot have capitalism without having an honest money supply.

I think this video on the subject is well worth your time.

Liberal crapfest "Sabado Gigante" announces cancellation in 2015

Today's news shows what I consider to be a small scale 3rd wave in the collapse of global liberalism and that is the announced discontinuation of Sabado Gigante.

The intelligence of Spanish speaking audiences has been insulted for over 50 years by the liberal symbol-laden TV show known as "Sabado Gigante".  As someone who learned Spanish as a 2nd language I would sometimes watch it in order to get exposure to native speakers.  Gawd, what an insulting mess.  For those who have never seen a few episodes I would have to describe it as a strange combination of the Gong show, Rocky Horror Picture show and Benny Hill all wrapped up in one burrito.

There were always scantily clad women, crappy singing contestants would would be symbolically fed to the lions by a character known as "El Chacal", etc.   The host would lead the audience in singing songs.  I think you get the point.  Mindless liberal "entertainment" at its very worst.

Interestingly, no reason was given for the announced cancellation.  Rating numbers still seemed to be pretty good.  Usually the powers that be don't make changes unless the money dries up.  Perhaps that is what happened and we just haven't been told the details yet.   In any case, make no mistake, this is clear evidence that liberal bullshit is in retreat at the global level.  Societal changes are coming folks, real ones that will be visible and tangible.  These things I am pointing out are just the early signs.  Perhaps the end date of Sept 19, 2015 gives us some insight as to when the real changes begin to arrive.

Huge swing in [RUSL] on Friday

In the backlink my model was clear: GTFO of RUSL at least for the near term.  The model said it would most likely take either the red or blue paths and of course both of those begin with big moves down.




 The model suggested one of the 3 likely bottoms would be $27.34.




So on Friday 4-17 RUSL went into free fall losing nearly a full $9 from Thursday's close to Friday's bottom.  It bottomed within 6 cents of the lowest of my three most likely price targets above.

Who says Elliott waves don't greatly increase your odds of winning?  You simply never get this kind of potential accuracy out of old school technical analysis and of course "fundamental" analysis is even more vague and emotional than old school TA.  Not that you always get perfection from EW but I have so many documented cases in these pages of calling non-obvious turning points to within a few pennies using the EW system that you really have to give the system its just due.  And yes, it does help to have a lot of experience in counting waves.  It's one thing to be told by the African safari guide how the animals move.  But having it explained briefly does not make one an expert.  One must study it and even live it for a significant amount of time before the results become worth writing home about.  And even then the accuracy of any wave counter has built into it some waves of ebb and flow in terms of accuracy.  It is impossible to escape as it is built into our DNA and perhaps into the very fabric of the universe.  Yes, I know, that sounds laughable to some but there is order in this universe and all you have to do is review the periodic table of the elements to understand this basic fact.  What appears chaotic is in fact simply a simple failing by the observer in the areas of omniscience and omnipotence.

In any case, the carnage bottomed at almost exactly the 50 fib and so the herd left itself room for this to be treated as a pullback in a broader move up.  Again, the waves are cloudy here but a move back up through that top rail of the wedge and in fact anything except for a big sell off from Monday's open begins to strongly favor the bullish model.  I personally hope for the blue path above that ends mid channel nearabouts $15 in 5 waves down.  If I see that I am loading the boat with RUSL because I would count that as a failed 5th.


Likewise, a breakout above the top down-sloping blue rail would be good technical reason to buy the dip.  The bounce point for this remains in the $200 range according to my current model.

[DJIA] {UVXY] update

Backlink.  DJIA model from that link is below.




Friday's selloff left little doubt that the green path of the above model is most likely correct.  In fact I wrote in the backlink:

"Three models are presented below for the very near term.  In the green model, breakdown begins tomorrow and we know it is upon us by a break down through the lower rail ... There is nothing on the chart which hints to me at which it will be but I bought back into UVXY at the close simply because it was down 4% even though DJIA, $COMPX and S+P all closed red.  This is the kind of divergence that one sees near a trend change.  It is not any kind of hard or fast rule, just an observation.  So I bought back in at $10.57 during extended trade. " 


While DJIA closed only ~280 points down, the peak dip on the day was ~420 points.  The chart fell through that lower rail damned near at the speed of gravity.  There was no hesitation in this sell off folks; whoever was doing this was conviction selling / cutting and running.  This is what margin calls look like IMO.  Look at that nice little 4th wave triangle and then the a-b-c retracement back up to it.  Talk about text book Elliott...

So while someone sure was selling, the herd was still in buy the dip mode.  You know, that same strategy that has worked like a charm since 2009.  That strategy that counts on government bailouts to support ridiculous levels of margin debt lending.  That old Bernanke put.  The VIX fear gauge bumped up a bit during this selling but certainly there was no widespread panic indicated yet.  In addition, the volume was not very high, just a bit above average. 

So again, the price move tells me the early movers are bailing out but the remainder of the herd is not yet convinced that it is time to wake up and start running.  If my EW model is correct this should begin next week.   In other words, the model says that from the March peak we have had the triple stutter step: 1-2, 1-2 and then just today alone one more level of 1-2.  That means Monday we should see a big gap down from the open as 3 of 3 of 3 plays out.  I doubled down on UVXY at the close in anticipation of this event.

When VIX pops 10% in one day or more and UVXY scores 30+% in one day as a result, that is when we can start talking about fear returning to the markets.  This will not happen until the DJIA falls below ~17560 which will represent a lower low for the DJIA.  At that point, a Dow theory sell signal should have been confirmed and old school TA is likely going to react.  I think that it must take the power of a 3rd of 3rd of 3rd to do this and per above I expect that to happen on Manic Monday the 20th of April 2015.

On the UVXY front, here is the model from the backlink:



Today's action seems to be taking the red path so far.  Per my model above, this eventually ends up in a lower low.  By not breaking back up into the body of the falling wedge, the herd has shown that it has not, so far, viewed the DJIA sell off as being a reversal.  The herd is still trying to leave its way clear for a move lower in red as shown.

When I zoom way in close, the data is just not as clear as I need it to be in order to get a 100% clear count on this recent UVXY move.  While the DJIA chart seems clear, the herd did a good job in leaving UVXY murky.  Still, with today's gain in hand I would be able to lose 3% at the open on Monday after having doubled down and still break even from my last buy point so I have the luxury of holding over the weekend.  For now, I'm going to select the green path above as my primary count based mainly on my DJIA model more than the low level UVXY count.  It will be settled Monday at the opening bell.  The markets either gap down at the open or it is likely that my DJIA count is wrong somehow.  If that turns out to be the case, UVXY exposure would be to the downside as shown.  This could turn into a 4th wave HT for UVXY if it does not gap up Monday. In that case we should get a better read on the real UVXY reversal.  In any case, I think it is coming soon.

[GE] update

As the backlink shows, for some time now I have been working off of an incorrect model for GE.  That is not to say that I have suddenly become bullish on GE and in fact, far from it.  I still hold my Jan 2016$13 puts and I plan to buy deep out of the money Jan 2017 puts as well, probably at double the amount of contracts as I initially purchased.  Despite the recent share price surge, I maintain that GE is in serious trouble and that it will begin to plummet hard over the next 18 months with a non zero chance of being broken up in BK court.

I have been using the parallel falling channel model for GE on the linear scale for some time now even knowing that the log scale showed that there was room for another potential rally to new highs.  So now I am flipping over to monitor GE only on the log scale which shows that it has peaked or very nearly so.

Today's "earnings" results from GE (how can a loss of $13.6 billion USD be used in the same sentence as "earnings"...) news is potentially a big catalyst for the coming sell off.   Should be sending fear into the hearts of anyone with money in this vendor finance scam of a company.

Importantly, the engine of its vendor finance scam -it's finance division - has been divested.  It no longer has the ability to borrow money using the name "GE" to get low interest rates on behalf of its customers.  So now they will have to use conventional finance mechanisms which will have much higher rates that are commensurate with the risks that are involved in financing capital equipment.  It means that many of GEs "customers" will simply evaporate because they never could afford to buy the stuff if they weren't getting an artificially sweet deal on the financing.

Zooming in, here is my near term model.  I don't know if it needs one more move up as shown to complete green 5 but once it breaks down below the top rail I think the real selling should pick up very rapidly.  Anyone holding GE long though their reported loss of the engine of their debt pump, falling revenues and in fact a HUGE revenue miss in their "core" industrial businesses and of course, whopping $13.6 billion dollar loss is completely out to lunch IMO.  Management is gutting the company with a dividend of 3.7% based on an overly large payout ratio of 59%.  This is NOT what a company which wants to be around in 2 years does at a time when revenue is falling rapidly.  They should be conserving cash because they have precious little of it in the first place.  They have 16bn cash backstopping 365bn debt.  Rotsa ruck with that when the recession is officially announced.  Mish thinks we are already in one and I agree.  The charts are telling me that soon the herd will figure it out as well.

Hysterical ESPN reporter rant gets her suspended.

The new turn toward conservatism is going to leave tons of casualties in its wake.  Today's example of liberal elitism gone wild is a short video showing some no name ESPN reporter verbally abusing a parking attendant.  The clear message she conveys is "I am special because I am on TV, I am an integral part of the big boy's club and you are just a lowly useless eater".

Amazingly, the parking attendant doesn't come though the window and slap this a$$hole upside the head.  In fact, she even does the conservative thing and warns the ESPN fool that she is on camera!  Kudos to the attendant on both fronts as it only shows just how cheap and petty Miss Elite Wannabe really is.

The reason I bother reporting these things is because they are showing us the bigger picture.  I know a lot of people who basically gave up resisting the status quo.  They saw the momentum of the elite, saw that everything seemed to be going in their direction forever and felt desperation about the future of the country, their own lives, and the lives of their children.  A lot of easily scarred people in the US even said "the US is lost, I'm moving elsewhere". 

• Side note to those who did this: GOOD RIDDANCE, COWARDS.   If there were no guns in the hands of American people, no means of self-defense should government come kicking in doors and taking people away to camps, then I would be among the first to abandon ship.  I do not think that is cowardly.  I do not think that unarmed people should just give away their lives to a hopeless cause.  But therein lies the big difference between America and pretty much everywhere else.  If you run away from perceived tyranny in the US then you are just a useless coward because we DO have the means to fight real tyranny should it actually be attempted on us.  
• What I'm trying to show is that the elite in the US know that tyranny will not actually work here.  They can try to intimidate us and they can pick a few of us off at the margins and some cowardly fools will even run away from the perceived threat but the elite cannot take the American public on in a declared war.  Bundy ranch even proved that the elite know this and I was very clear to point this out at that time.  The liberal elite know that they wouldn't last 2 months should open season be declared on them by 5 million NRA members and 10-20 million non members (combined total still well under 10% of the population...).  The US military could not save them in this case. and in fact the US military would splinter.  I believe that at least half of the US military personnel would not fire on the American people when ordered to do so by those at the top.  The entire US military is only 2.35 million people.  Much of the killing power of the US military would be useless in a civil war and the con men know it.  What good is the entire navy in this case?  What good are nukes?  Cross both of them off the list of offensive capabilities in a civil war.  What good are bombs?  How quickly would the military lose popular support if they began bombing US targets? 

It is for the people who are scared but not fleeing that I have always tried to expose the truth about these things and I will take this opportunity to mention the key points once again so that people can realize that the situation is not at all hopeless:

• Humans are a herding species, the herd follows what it perceives to be in its own self interest.  The herd needs and therefore seeks new economic value.
• New economic value is only achieved through the labor of the herd members.  It is specifically NOT added by central management of the economy, money printing, etc.  And it certainly is not added by a military should it refocus inwardly.
• The elite are playing a con game on the herd with their fake money supply which appears at first glance to be new value entering the economy as new money and credit are created from thin air.  Again, the herd loves new value and it loves stability and security.  So while the con looked good, the herd followed those running it.
• While the real intelligentsia of the herd is limited to those at the top of the pyramid scheme, many layers of collaborators were built up below them.  The temporary loyalty of those comprising these layers was bought with Mammon Money AKA credit and debt.  When that runs out the once loyal will become a big threat to the elite because many who feel that they were tossed by the wayside by their elite masters will spill their guts about what they learned while in the employ of the elite in order to buy their way back into the favor of the herd.
• The elite are not as rich as many suppose.  Their net worth is not in real stuff but rather mostly exists as accounting entries.  As the credit is pinched off, those asset prices will fall and along with it the net worth of the top tier.  As they see their power (i.e. money) wane, they will quickly move to protect their hegemony and this is where the lower layers will figure out that they themselves were never really elite as they were led to believe.  They were in fact never anything more than rented collaborators who prostituted themselves for the benefit of the military industrial complex.  When debt (which translated into power) was on the upswing, the elite placed their protective shield around these co-conspirators who, unfortunately for the lower level conspirators, mistook this as they themselves being elite and untouchable.  This was a happy fantasy which their masters were happy to encourage the belief in.  Once false societal stature learned, that is a hard thing to unlearn and as you can see from the video, many of those involved think they are much smarter than they actually are.  I mean, come on.  The minute the TV girl heard that she could be, well, on TV and in a very negative light, she should have apologized and shut the F up.  But she was not intelligent enough for that and so now she is suspended and IMO she will be thrown under the bus as the vid goes viral.  The elite will throw their children under the bus if needed in order to maintain hegemony so what chance do prostituted co-conspirators have?  Same is true across the board as I have been pointing out with police abuse.  
• The new message is going out right now: abuse the people - who are the REAL engine of economic growth - and you will find yourself under the bus.  In this capacity, if the pen is more powerful than the sword, the video camera is more powerful than an army.

Nice deal from Harbor Freight.

In Austin we have a Harbor Freight store.  It's a great place to pick up cheap Chinese tools.  I just got this interesting ad from them for a welding helmet.  They sell this helmet all the time and in fact I bought one about a year ago but I have never seen the prices used in this ad before.

They claim the normal price is $99.99.  If you subtract $44 from that then the saving is $55.99.  Why would they say "over $55" when they could say "almost $56?".  Also, when does anyone ever price something in even dollar amounts?  Why not $43.99 like they usually do?

In this ad, 55 is positioned atop 44.  Conservatism is winning out over liberalism.  It goes much deeper than this but nobody wants to hear the full story just yet.  Perhaps in good time as they reveal more and more to us.  This, however, is not a coincidence IMO.  Laugh and roll eyes now, understand later...