Physical Breakdown Ho! ~ The Risk Averse Alert

Wednesday, April 04, 2012

Physical Breakdown Ho!

An interesting Elliott Wave Principle "like from like" possibility is developing in the Dow Jones Transportation Average seen over the past five years, this at a moment finding skyrocketing fuel costs threatening to accelerate insolvency throughout the physical economy...

DJTA 5-yr

The three component waves of wave A — waves (a), (b) and (c) — might prove a template of what's to come, particularly now following wave B recovery whose form and distance matches that of wave (b) of A. Formation of five waves down ultimately targeting levels last seen in the 1987-1994 period find precedent in form and distance matching wave (c) of A. Relative to distances traversed prior to its formation, wave (c) of A was outsized, as wave C likewise might be, relative to waves A and B preceding it.

The larger view of this on a weekly chart follows...

DJTA weekly

Again, the Elliott wave likeness in both form and relative distance traversed by the component waves of a corrective wave forming since wave (III) top in 2007 seems worth noting given present circumstance, both fundamental and technical, whose consequence portends an end that could be severely foreboding.

Apparently, fuel shortages in the Middle East and North Africa have been on the increase over the past couple weeks. Go figure this region of the world would be first marginalized in a physical breakdown well on course to gripping the entire planet in chaos sometime in the not-too-distant future. Misguided hatreds but growing, so too is fuel for war in the allure of feudal spoils to carry on with following the upcoming burial of Adam Smith's Leveraged Ponzi Scheme (a.k.a. the post-Bretton Woods financial system). That this might occur under cover of some yet largely unimaginable calamity whose dimension, too, presently finds several lesser precedents over the past decade or so, is a measure of the significance of this moment in relation to all of recorded history. So few have any clue of the risk, and yet isn't this always the way?

Fast Money
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