Deutsche Bank update. [DB]

In this post I modeled a significant bottom to be put in place for Deutsche Bank [ticker: DB] at around the $10.75 level.  The exact bottom so far is $11.18.

So what's all this crazy talk about a bottom?  Everyone knows that DB is in DS (Deep Shit).  Why would anyone even think of trying to trade the shares of a company which is obviously at such great danger of BK?  Hasn't Merkel said she would not bail them out?  Hasn't the US slapped them with a fine that is very nearly their market cap?

Well, consider this another installment in the lessons of Elliott wave trading.  If you can't read the chart, either double click on it or right click and select view in order to get the original full size chart. 



From the very bottom I count 5 waves up.  That likely means that the bottom is in.  That is why I am writing this post and for no other reason.  Everything else is noise.  All the pertinent news that affects share price is already baked into the chart.

Now, there are a variety of possible outcomes for wave 2. For example, it could already be in.  IF that is the case then we should expect to see a gap (not gaap, DB doesn't know anything about gaap ;  ) up tomorrow.  If that green 2 was in fact simply A of 2 then expect a gap down per the blue path to bottom at the 50 fib ($12.24).



Now consider this: after all these months of DB plummeting  I have never indicated it is at or near a major bottom.  In fact, it was never worth charting to me until now.  And the only reason it has become worth charting is that the Elliott wave count suggests that a bottom is LIKELY in place.  And yes, the key word is likely .  You see, nobody can predict the future with perfect certainty.  Scientists now understand that they cannot predict where matter will be located - they can only predict the probability of location.  This concept underpins our universe and so to think that you can start with uncertainty and then ever end up with anything except uncertainty is a fool's errand (despite the dumb comment in the article that said simply having enough uncertain things can create certainty - ask all of the exploded quants about this or better still, ask the banks about this when their derivatives books all do the impossible and implode at the same time sometime in the next few years...).

In any case, this is what differentiates the bottom and top calls of an Elliottician from everyone else: we don't have an emotional connection to the shares, to the system, etc.  When Jim Cramer screams buy buy buy, he means buy and hold for a higher price.  Why?  Because he has developed an emotional attachment to the shares.  He has a gut feeling.  But what if that gut feeling begins to go against you?  When do you sell?  When do you realize that that gut feeling had more to do with indigestion from that pasta dinner last night than it did with divining the future moves of stocks?  In short, you could go down 10, 20, 30% or more, the whole time with a gut feeling that it is about to turn around.  EWI calls this the slope of hope.  In any case, Elliotticians don't do that.  If our wave count is wrong we will know it directly and then we will stop losses dispassionately and then look for the next entry point.

In order to do this you have to have a set of rules which enables you to know what the chart should do next so that if it doesn't do that then you know that your model does not match what the herd is doing right here, right now.  So let's say for example that tomorrow DB gaps down in the AM.  I would then sit back and patiently count 5 waves down with special attention to the level of the 50% fib retracement.  IF that would happen THEN I would buy.  As soon as I buy, I put in the stop loss.  After all, I would only buy for a reason defined by the Elliott wave principle and if the chart sussequently disrespected that reason then I lose my only reason to hold the shares.  BAM.  Sell them.  Take your 1% loss and then let the chart play out a bit more until another likely EW entry point is found.  As legendary physicist Richard Feynman once said:

It doesn’t matter how beautiful your theory is, it doesn’t matter how smart you are. If it doesn’t agree with experiment, it’s wrong.

 At some point you will find that your stop is not triggered.  Your theory (wave count) turns out to be right and the stock shoots up in value.  You get to gamble in the game with the chance to make big profits but without much similar chance of losing.

I know it sounds like magic or worse but I perform this every day and I now have a growing following on my paid blog site.  My service is only $39.95/month but you can bet that if people weren't getting many times that value in trade timing knowledge that I would have no business at all.  Even rich people are trying to get out of any monthly payments these days.  Those who have joined the team only stay on the team because they are making money.  My service is thus not a consumption item like most online services.  It is a labor multiplication tool for traders.  Its a money making tool.  Feel free to stay tuned to this channel to see how this DB chart model works out.

Markets are ripe for a miscalculation.

The federal reserve is now like an Indy car racer.  It is trying to run a race at the extremes.  If it doesn't go as fast as possible it will lose the race and then all Hell will break loose.  So it continues speeding around the track thinking carefully about its every move and knowing that any miscalculation will result in a fiery crash into the stands.

All I can say is that the longer an Indy car racer is in the game, the higher the odds are that he will get hurt or killed.  The problem for the fed is that the race can never stop.  They have get more and more creative about what they do and say lest the people figure out that it is a debt Ponzi that can have no good end.

A good example of living near the edge is outlined in a Goldman Sach's report from mid year.  They conclude that if rates go up by just 1% in an unexpected way then $1 trillion dollars worth of paper value will evaporate.  They use this fact to warn the fed not to move too quickly with its rate hikes.  But what these people don't tell you is that the market controls the interest rates, not the fed.  If nobody shows up at the bond auction to buy bonds with a 0.25% interest rate then the only way to sell these bonds is to sweeten the pot with more interest.  At some point bondholders are going to worry about being bagholders and they will demand more interest in order to compensate them for this risk.  That is how interest rates will go up next time, not because the fed wants to control them upward.

Deutsche Bank cooking the books? And now execs will see prision.

Remember the bad old days when banks would lie cheat steal kill defraud and conspire only to have the individuals involved hide behind the protective shield of the corporation?  Remember when banks, after getting caught laundering drug money and helping people evade taxes would get a fine and then not be required to admit any guilt?  All I can say folks is not no more.  Them days is fast approaching status as a historical blip.

I said this would happen and now it is happening.  In today's case several of Deutsche Bank's high level bank managers have been personally charged with various criminal acts in Milan.  To be sure, I am quite convinced that the current charges are far from the worst thing that this and other banks have done.  When dealing with this much money, this much power, this much political favor which is so extreme that entire countries rise and fall because of it, you know that there was no limit to the things done in order to protect their criminality.

But all this was only possible to happen in an era of a growing money supply.  Now that credit is and has been peaking around the world there is far less easy money with which to use to bribe everyone.  Also, the sleepy sheeple of the world are beginning to wake up to the wealth divide and while they don't understand that the root cause of all these problems is a fraudulent and fake money supply, they do know that they are getting screwed and they are giving their elected reps an earful.

This and only this is why anyone is getting personally charged with anything.  This and only this is why some very big names and powerful people will find themselves being thrown under the bus.  Sooner or later they will attempt to throw someone under the bus who knows something that he was not supposed to know.  Had the powers that be known he knew it, he would have been spared but since they won't know he knows they will select him for public sacrifice in order to throw the herd some red meat.   When this happens, major major changes will be coming because a chain of dominoes will ensue as one criminal bastard begins to rat out the others in order to save his own ass.  Although few besides me are saying it, this is coming as sure as the sun rises.  I know it is coming because government and big corporations are a criminal cartel of organized crime and this is how all organized crime syndicates collapse at the end of their life cycle.

The fed is thinking about conspiring with congress

Despite stocks being near record highs, Janet Yellen knows that she has to keep on pumping more debt into the Ponzi lest it collapse.  But the fed is already buying more US treasuries than it wants so now Yellen is talking about turning Japan - turning Japan - turning Japanese (I really think so!).  What I mean to say is that she wants the immoral permission to buy corporate stocks.

Yes, that's right.  She wants congress to put immoral laws in place that give her the authority to essentially create more debt out of thin air and to use it to buy the stocks of private corporations.  If you are rich with large market holdings or if you are a corporate CEO who gets compensated in stock options this is a massive yet fraudulent windfall.  You see, Janet doesn't have any money to pay for this.  The payment would be done using dollars created from thin air in order to keep her Ponzi plate spinning.

This is a scam of such magnitude that I cannot express the depravity of it.  People with no economic background (i.e. poorly educated working class) will accept that these highly educated people are doing this in order to make things better for everyone when in fact each time it happens the wealth divide becomes more of a chasm.  How many times must the ditch digger be slammed in the face with a shovel before he figures out that these assholes are fucking him???  Poor people would be much better off in the long term if they just surrounded the capital in their millions with signs reading "no more public obligation and risk in order to bail out the private elite status quo!".

But alas, most of the sheeple in this and every other country simply do not understand that they are being scammed by these money games and that someday someone will have to pay the bill.  It is a debt Ponzi and no Ponzi lasted forever because the lies and corruption required by them must, by the very nature of the scam, increase at an exponential rate.  The sooner you shut down a Ponzi, the less damage will be done to Mark and Patsy.

At this point there is no way to avoid big problems at some point in the future.  All these corrupt actions do is push the day of reckoning out and make certain that the extent of damage from the collapse will be as bad as possible.  Janet Yellen is a soulless bitch.  That is not intended to be an insult but rather a factual description of her actions.  And don't tell me she doesn't know what she is doing, that she is stupid or misguided.  BULLSHIT.  She knows.  They all do.  If I do, how can they not??  Everything with them is a calculation, it is so easy to see.

Jerry Brown tries to prop up his failing state retirement system for public workers.

In a blatant attempt to fool people into helping him prop up his failing public worker retirement system, socialist CA gov Jerry Brown is slated to approve a state run retirement system for private workers.

We all know that state employees in all states have been made unkeepable promises.  As the number of retiring boomers rises to meet the fat part of the curve, the system (which has promised its victims a benefits package that would require 7-9% annual returns in a 0 to 2% world best case unless you are taking wild risks...) is coming under increased stress. 

Brown has limited choices in order to handle the exponentially rising expenses associated with keeping these false promises:
1) default in some fashion.  Simply tell the old people they were lied to and that they shouldn't have believed in fairy tales.  Of course then the old people would be up in arms.  Besides, it would be the honest way and politicians are never honest.  At least the successful ones aren't.
2) find some other revenue source in order to make good on the payments.  Perhaps increase taxes on the working people.  Nah, that won't work either, they will be up in arms too.
3) make more promises like any con man running a Ponzi. Pay the outgoing public service pension plan participants using money from new people entering the public service system.  Oh crap, there are not enough new people in the public service to make up for the shortfall.
4) trick a new class of workers into joining the Ponzi!!  YES!!!

Clearly option 4 is the one that kicks the can down the road and so of course that is the one that the useless politicians are going for.  At first the system will be mandatory to be enrolled in but you will be able to opt out of it if you have the patience to figure out how to do it, can read English, and otherwise understand that it is a fucking scam.  But many people, generally from the lower working classes, do not have the education and experience to know that the government is nothing but a Ponzi operator.  Over time, if the people fail to protest, the opt out clause will simply be eliminated and the government will essentially treat it as a tax, just like Obama did with the scam ridden and failing Obamacare con job.

What did not work for the public retirement system will in no way work for the private sector but, again, unless protested against vigorously, it will breathe new life into a system that would otherwise collapse very shortly. The key thing will be how many people fall for it.  They tried government socialized healthcare and it flopped indicating that the people were getting wise.  So it will be interesting to see if enough fools fail to opt out of the system thus effectively exchanging their money in hand today for Wimpy promises that will never materialize tomorrow.

My God in heaven, I swear I have never seen such organized criminality in my life than I have seen in US government.  If these debts cannot be repaid for those in the system today, how will they be paid for with an even larger class of victims in the future?  People of California, this is fraud pure and simple.  It will sound reasonable as if Big Brother really wants to take care of you but Big Brother doesn't give a $hit about you.  Get that though your heads!!  Why do you think strangers should care about you?  Are they your family?  Are they your priest or minister?  NO!  Stop believing in fairy tales!  Stop believing that someone else cares anything about you BECAUSE THEY DON'T.  To care about you is the role of family and of church and to a lesser degree of your immediate neighbors.  But fat assholes in government??? NO, they do not care a shit about you.

Carta abierta a los hispanos viviendo en California: Ustedes necesitan entender que el gobernador es un criminal que quiere disimular su hurto como si se tratara de servicio y soporte.  El criminal nombrado Jerry Brown sabe que muchas personas educados de raza blanca se salga del programa. El piensa que los hispanos son estupidos acerca del dinero. El se trata de abusar de la confianza de la gente.  El esta usando este programa como arma economica contra ustedes. El no es amigo de ustedes. Ningun amigo intentaria enganar te gusta esto y dejarte empobrecido en tu vejez. Si entiendes las matematicas un esquema de Ponzi, debe comunicarse de manera efectiva con su familia, amigos y vecinos. Ensenarles como salir del programa. Decirle al gobierno criminal de California que la comunidad hispana no van a aceptar falsas promesas de una jubilacion para que en el futuro. Diles que encontrar otra manera de financiar sus promesas pasadas a otras personas. Guarda tu dinero por su mismo!  No necesitas el gobierno implicarse con tu jubilacion.