[LL] update - almost time for shorts to get hurt.

At the backlink I showed a 4th wave HT playing out.



The current snapshot strongly suggests that the 4th wave HT is now finished and we should see wave 5 playing out.

Nobody can say how deep the 5th will be but I'm a bit less bearish on its downside possibilities now than in the past post.  The updated model above suspects that $25 will be support.  While this would leave blue 5 something short of the green v-bar shown in the model (which represents the magnitude of wave 1 of the larger wave), if that were to happen then red 5 would be much, much longer than red 1 above and that detracts from its odds of happening.  A reasonable model would select some value between the length of red 1 and the length of blue 1 that also had basis for psych support (like $25).  Of course, the wave count will determine when red 5 is actually finished but it should happen in the next couple days. 

I'm going to buy into the bottom folks.  The most recent moves have been anemic and without much conviction.  I'd say that the smart shorts are trying to lock in profits quietly right here before the short squeeze happens.  After all, this is sold short 30% of the float folks.  This "LL is going out of biz because of some failed chem test" story does not wash to me.  Now, LL might indeed eventually BK, but if so it will be because of a tanked depressionary economy, not some Chinese chemical standards F up.  AFAIKT, nobody has been complaining of medical effects like they did when Chinese wallboard was outgassing a few years ago.  In those cases, homes did have to be retrofitted with compliant wallboard which is a big stinking deal.  Who went BK because of that?  Nobody that I recall!  So why is LL going BK because of this? 

All I can say is that when the short herd begins to panic we should see some real fast upward movement on LL.  They loved it at $120, and today they hate it at $27.  I think they will love it again at $60 again.  30% short is a whole lotta built in mandatory buyers if this begins to move up suddenly in the next week or two like my wave model predicts.