Sears [SHLD] upcoming opportunity

Sears has now entered that phase of its breakdown where it is beginning to point straight down as in all sellers and no buyers.  Many of those sellers at this stage of the game are short sellers.  If you think about the dynamics of a unicorn tail, the shares go into a panic sell off and head straight for the ground after having already lost much of their value.  Then, after the final spike is in, the shares rise rapidly with a 2, 3 or 4 bagger not being uncommon. 

That rise is not coming from new believers in the shares!  When the shares hit bottom, they are reviled by the market.  But they are also loaded to the gills with short sellers which means they have entered a negative Ponzi of their own.  Unless we expect the share to just go straight to zero, which is rarely if ever the case, these shares will begin to bounce and that bounce will set off a chain reaction in the shorts who will then begin to panic buy.  That is the nature of a unicorn tail.

I want some of their money on SHLD.  If my model is correct then I expect a move back up to test the lower rail from below which will bring in another wave of rabid shorts pushing this down to ~$4.50 or even lower for a brief period of time.  But then some "news" will happen which most insiders know is not new news but which is enough to scare the lead short sellers into covering.  Shorts who cover are called buyers..  The shares then rise rapidly on the cascade of short covering.

Maybe it won't go down just like I want it to and if not then so what.  Another trolley car will be rolling by in 10 minutes.  But if my model plays out then we should see a quick 3 bagger on these shares off the bottom.

By the way, people who don't know how the stock market works will say I am crazy but in fact a properly executed EW driven trade is not as risky as it might seem because this is not a buy and hold deal.  I'll leave that to idiots who think Jim Cramer knows what he's talking about.  Buy and hold is for people who don't think it is possible to model an exact top or bottom.  Thus they never know where to put their stops.  I on the other hand think I can get pretty close and I will employ the cost average strategy once I see red 5 being complete.  Start with just a very small bet (whatever that means for you).  Then I would only add to it if I got the right EW setup.  If it spiked down in a huge extension to $2 then I would double down. 

So start small at the point where you think the shares bottomed per the wave count.  IF right then you make a small profit on the triple.  If wrong and it plummets straight down then go in heavier.  When it bounces, sell to make yourself whole and then play with house money. I can't tell you how many times I have made this work for me.  Remember, I don't give a shit about Sears.  I don't care if it BKs or not and it probably will.  I have no emotional dog in this hunt.  I simply know that USUALLY when the shares are headed straight down like this they don't just auger straight to zero.  Bankruptcy is a process and there are people who are working like crazy to avoid it even it is eventually unavoidable.  Thus, straight down (or straight up) is generally a sign that there will be a very trade-able reversal soon.

Hedge funds leaving the playing field.

Hedge funds have been closing by the droves of late and the latest two are those of Chelsea Clinton's husband along with a Goldman hedge fund London operation.  Folks, hedge funds don't close on their own. They close where there are not enough people putting money into them.  I think we are seeing the signs that there are getting to be fewer and fewer suckers.  I think that the move toward conservatism is telling people to just save their money instead of gambling it in a wildly volatile market into which a Trump presidency will likely do little more than add volatility.

When people begin to leave the Ponzi like this, the Ponzi is not long for this world.  There is still a ton of money to be made on the short side of things when the big collapse begins.  Don't think its not coming.  It's coming.  Remember when I was saying that we would see a significant rise in civil unrest in the coming years?  Well, just look around. Everyone is at everyone else's throats.  The country has never been more divided and that division has more to do with wealth inequality than anything else.  Until the wealthy elite are brought down there will be no happiness among the people.

Mish on the source of US economic problems.

As usual, Mish looks at the data and ignores the herd noise when he writes, "Following Nixon closing the gold window on August 15, 1971, credit soared out of sight to the benefit of the banks, CEOs, the already wealthy, and the politically connected....The source of global trading imbalances, soaring debt, declining real wages, and the massive rise of the 1% at the expense of the bottom 90% is Nixon closing the gold window.".  Yeah the formatting of that article is bad.  But the message is clear: when Nixon defaulted on dollar convertibility into gold, the dollar became literally worthless and everything that has happened since can be traced back to that event.


Of course, that was the main trigger.  IF you really want to know the root event that set us up for the coming collapse it was the US take over of the global money supply under Bretton Woods 1 wherein we told everyone else to forget about gold and instead just link their paper money to ours.  We in turn would link ours to gold.  But it created a single point of failure and we worked as hard as we could to abuse it in order to move the USA ahead of everyone else.  It worked.  It was a good long con.  But now everyone else has the manufacturing and we here in the US only have the consumption,  What do you think will happen when those who are sending us their goods for free (i.e. in return for debt notes that are intrinsically worthless) decide that they will keep their goods instead of sending them over?  Of course, the US will quickly try to rebuild our manufacturing base but that takes time and it takes money.  Where will it come from?  More money printing??  NOT without hyper inflating the currency folks.  The dollar was a good scam but it is not magic (although it was definitely magick).


Mish's list of things caused by removing all value from the dollar and locking it its status as fake money is only partial.  It has caused structural changes in our society.  All the dishonest liberal fakery that has come forward is a direct consequence of dishonest money.  They are linked at the hip for reasons I have explained 100 times in these pages.   The new conservative wave is going to lead to more honesty and more transparency (even if such transparency shows off our mistakes in the bright open light of day...).  Fake Mammon money cannot live in these conditions.  Sooner or later there will be a "currency event" and the US dollar will lose reserve currency status very quickly.  Many of the things that require this status, like high leverage of US banks, will collapse as a result.  When it starts it could take as short as 2 weeks or as long as 1 year to collapse (which would still be very fast).  But once it tips its hand that it has entered the collapse stage, it HAS to collapse quickly else people will be able to escape with their spending power intact and that is NOT how a Ponzi works.   The spending power of most of the participants must go to those few who exit near the top.