Calling a top on Tesla

Wall St. darling Tesla motors is in a capital-hungry manufacturing ramp up which will require it to sell more shares or take on debt.  Now would be a great time for Tesla management to unload some shares on the hapless people buying the dream.  Why now??  Because 5 rails have been hit forming a massive ending diagonal.   Following that, the lower support line was broken and now the back test from below is in progress:



It's foolish to say "100% certain" about anything but if TSLA cannot break back up into the channel from below then I give it a full 90% chance that it will collapse in a dramatic way, and soon.  Why?  Because after 5 big waves up (with the ending diagonal following an exponential 3rd wave so that the wave count is pretty darned high confidence), we have the breakdown and now the back test.  Here's a better view of it.  That back test from below better break through into the channel again or else the stock will likely be cut nearly in half as that ending diagonal (leverage pumped to the moon) unwinds and deflates.

I think that the 1st wave down has begun and also that wave 2 back up is nearly done.  Guess what that leaves next in line.  That's right, a big fat 3rd wave down. that will likely have a big gap down in it (AKA cliff diving).  I like Tesla cars but I would not be anywhere near this stock when it collapses and that collapse looks like it could be imminent. 

A break back up into the channel would be the short seller's sign to have caution.  My biggest wonder will be if TSLA collapses on its own or if the entire over bloated market gets creamed.  Neither would surprise me but when I see a woman driving around with her car near the capital until the cops shoot her followed the next day by a case of self immolation in DC I start to wonder if the pressure of the con isn't getting to the marginal players in society.  As Gerald Celente likes to say, when people lose everything and feel they have nothing else to lose, they "lose" it.  When the herd sees crazy things going on, it is more likely to react to anything in a more volatile way.

Wal-Mart is likely rolling over [WMT]

Backlink.

The chart below is WMT weekly.  I see a rising head and shoulder that just broke neckline support, and then back-tested the support-turned-resistance line from below to confirm that the breakdown is real.  I think the market is beginning to price in the new reality which is that pumping new money into the economy that was printed up from thin air is not helping in any real way and that the federal reserve is just about out of gas.  Its balance sheet, which it would like to think of as an economic shock absorber, is bloated with treasury and housing debt, both of which will receive a hair cut if they ever try to sell any of it in significant quantity.






At some point a decision will have to be made.  They will either choose to save the people at the expense of the central bank or they will choose the central bank over the people.  In the first case they will protect the dollar by actually stopping the money printing.  This would cause all assets to plummet in a deflationary crash followed by outright depression - something right out of the Prechter Playbook.  This option is certainly on the table and I think plans are being made to control riots and other civil unrest that will threaten to relieve the con men of their prominent positions of Ponzi power.  Look no further than the gifting of MRAPs to local police by the feds.  They are supposedly getting these vehicles from "surplus" even though they are brand new.  I call bull$hit on that notion.  That is a cover story for pre-positioning material around the nation, just like this Marine Corps Col recently said at a town meeting.

The second option is to not only NOT taper, ever, but instead to increase the rate of money printing and in fact to begin letting this new money out into the economy in a broad way - interest free loans to corporations and more free grants to poor people (welfare).  The problem with the second option is that very soon the price of a loaf of bread would be $10, gas would be $15 per gallon and salaries would not keep up with the price increases.

Either way, real buying power will diminish.  There is no possible escape from the effects of the collapse of a debt Ponzi just like a drug addict cannot simply walk away cold turkey without getting very sick and in some cases even dying as a result.

The decision as to which poison we are fed will certainly revolve around what is best for the military industrial complex, not the people (even though it will all be pitched as being done for the people).  If they think they have extracted all value from having the US own the world's reserve currency and now they want global money instead of the dollar so they can re-start the Ponzi then hyperinflation is the way to do it.

If on the other hand, they think they can deflate everything and still retain control of a very pissed off and well armed populace then they will allow the deflationary crash with people and try to use threat of military force to keep the dissenters in line.  If they are successful in doing this then they will restart inflation again from a lower level hoping for another 50 years of scammery.  I think, however, that once the people figure it out that the money will not live 5 more years past the point of awakening.  All fiat currency dies eventually and the dollar will eventually be no different.