[DJIA] collapse now unfolding.

In the backlink and its backlink I pointed out key support levels which, if breached, were very, very likely the beginning of a major collapse.  This chart pointed to the second key support which, if breached, would likely lead to a huge oh shit moment of historical import.




Before I provide today's chart, I want to call your attention to the fact that we technicians have been watching for this to occur.  We knew it would show up at some point as you can see from this post warning of the expanding wedge. The model from that chart is below.





Just a lucky guess maybe?   Not hardly.  Nobody knows the future for 100% sure but the EW model I have been using for years is the one I got from Prechter and which is documented in this post.  The important chart from that post is below.  Now you can clearly see why Prechter believes that the DJIA will drop sub $1k, perhaps down to $500.

Unfortunately, I believe he could turn out to be right.  I know how much of this market is not owned but rather borrowed on margin debt and the amount is huge.  Note the shape of wave (IV).  That is a Galaxy On Edge (GOE) which is why I believe that Prechter's count is correct.

Everything from 1935 until today was a 5th of a 5th wave.  Once a 5th is done, it seeks out the level of the prior 4th.  In other words, the DJIA price in 1975 which was well sub 1k. 




Here is the current snapshot.  The breakdown has, in all likelihood, already begun.  The coming wave should be  dramatic and powerful in nature.  5 big economy-killing waves down.
 


Those who do not believe this is possible (to say nothing of likely) are in for a big fat cold wet slap in the chops. This should be a real eye opener for the world and this collapse should prove that everything I have written over the years is not conspiracy theory but rather enlightened understanding of reality.  To name a few key points:

• A population boom is now in the process of leaving the workforce and entering retirement.  They have been playing catch up on their tax deferred retirement accounts.  They think they are clever and blessed to have this kind of tax deferral situation.  They are looking at their account statements with wild imaginations about how they will spend their retirements.  But the tax deferral was nothing but honey in the bee trap and Mark and Patsy are well and truly trapped.
• The damage to society should have been so much less but the 5th wave extended.  The mechanism behind this massive 5th wave move up from 1975 was the tax deferred retirement account.  You know when this became law?  1980.  That is when the military industrial complex created a narrow economic corral that led straight from the pastures where the cattle were putting on weight to the slaughter house.  Then they herded us all into it.  Fortunately for me, I figured out it was a trap a good number of years back and I bailed out.  I paid the taxes and the penalty too and then I was done with the government control of my future.
• The stock market is a Ponzi scheme.  It is not a store of value, it's an economic hologram.  It looks real, the account statements feel real but they are all valueless.  The scammers are economic parasites which have eaten up to the paint leaving the house looking whole but entirely unsound.  I don't think this, I know it.  I've looked at hundreds of metrics and the common theme is simple:  all the real money has been replaced by debt.  There is nothing left to take because it's already been taken and IOUs have been left in its place.
• No paper asset is safe in these times.  Not stocks, not bonds and not the dollar.  The relative valuations of each of these will vary according to its own wave count but all of them will go through massive volatility before this is over.  This is why I coined the term supernova economy many years ago and have never strayed from its original meaning.  If you Google "supernova economy" along with blog you will see that the top 5 hits are posts from my blog. 
• None of this is an accident, a miscalculation, unfortunate happenstance, stupidity or any other of the normal characterizations made by unenlightened people at times like this.  This has all been planned.  Folks, when the dust clears from this we will see that the banksters too the ice trays out of the freezer on their way out the door with all your loot.  That's how carefully this has been planned.  I don't care two shits who believes and doesn't believe.  I have data and so I don't need your belief.  Elite have known for a long, long, long time what is going on.  Greenspan even wrote about it before he became fed chief and the dark side of the force got to him.  I highlighted what he wrote below, "Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which — through a complex series of steps — the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
  This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
  
  That was Greenspan in 1967.
  
  Read his words.  They were chosen with utmost care.  Greenspan is clearly telling you that the government and the banks (the military industrial complex really) has conspired against America to steal our wreath and do what with it?  Replace it with worthless IOUs.
  
  Does Greenspan call it an accident?
  
  NO.
  
  He says that the law of supply and demand is not to be conned.  But history has shown that the people damned sure were.  Folks, I'm just an average engineer with average intelligence.  If I figured all of this out, how much faster would a  really slick dick con man figure it out?  Fiat currency and fractional reserve lending are a con game, pure and simple.  Fiat currency is bad enough but fractional reserve lending is the real threat. Because debt makes up 90% of our moneyless money supply.
  
  Gold is money and everything else is not.  Colored paper with writing on it certainly is not.  And again, lest you are still in disbelief about who knows what please consider that this is nothing but a loud round of laughter in our faces.
  

So if my ire sometimes boils all over these pages, now you know why.  I do not like being stolen from in plain sight as if I didn't know it was happening and I especially don't like people who simply trust government telling me I should do the same.  One day even the most gullible Mark and Patsy is going to wake up and when they do they are going to be pissed beyond measure.  Not just because they were robbed but also because they believed in the con and they were all into it until the day the house of cards blew over.

That day is very likely looming large according to my models.