Sam Collins says to buy the banks. [KBE]

Now that banks are peaking into 5 of C, Sam Collins has issued a buy call using legacy TA such as the golden cross, etc.  These legacy TA methods work fairly well early in a cycle when trying to discern where a trend turn has occurred and where 2 is turning into 3, etc.  But late in the game like right now, they just draw more suckers in so that the trap door can open beneath them.  No way has legacy TA ever caught an exact bottom or top as I have shown many times on this blog that EW is capable of doing.

It could turn out that the wave in progress is not C but rather 3.  But even in that case there is $2 likely potential upside to where green 5 of blue C equals the length of green 1 but $6 likely downside back to the level of the prior 4th at green 4.  Yes, this sudden spurt could be 3 of 3 of 5 and so could go a bit higher before turning into wave 4 and yes wave 4 could go sideways instead of pulling back as shown.  So maybe Sam will be a little right for a couple months but I don't see any big money being made here but I do see significant risk and that makes it a bad bet.
 
I can also see a count where KBE is actually already working on red 5.  So the time remaining until the next big reversal could be even shorter than shown in the chart below.


Yes, something else again could be playing out but the odds favor the above two scenarios by a wide margin.  Also, Sam is completely ignoring the shellacking that the transports are taking.  Again they are down big again today -1.6 %.  The chart of the transports could still be a 4th wave but it is looking awfully droopy for that now.