At the
backlink I was modeling the recent peak as a deep vee 2nd. I wrote, "
...EWI has repeated their view that the DJIA might have a pullback soon but
eventually it will go to a higher high. I never disagree with these
guys lightly. But since that $77 peak I count 5 waves down to $73 ish
and then only 3 back up. So you can see how my count sits on a knife
edge right here and in fact whether I turn out to be correct or
incorrect at the end of the day I like the fact that the decision point
comes down to something that is clearly quantifiable: if my count is
right we should not see a higher high than the one which kisses that
lower rail from below. So at this point I think that we have an owl,
declining double top 2nd wave. If I'm right then the next wave down is a
3rd..."
My view back then also disagreed with Avi who was looking for higher highs in the major indices. So far this is still a deep vee for them as well. In fact, the banks power the indices and so follow the banks if you want to know where the indices are going. And junk debt powers the banks so look to junk debt if you want to know the future of the banks. Junk debt is crashing.
The recent level on BKX could be B of 2 with one more wave moving up to kiss the resistance line from below or it could just gap down soon and begin to look ugly without the Santa rally that everyone is expecting.
I find it very rare that we have a setup like this and then the chart makes a new high. This has the owl written all over it IMO.
No bottom fishing yet for BNS?
ReplyDeleteCaptain, BNS (Bank of Nova Scotia) has completed the H+S target at $39.55. The macd is showing good positive divergences. The drop from 2014 top has almost reached the 61.8 fib retracement area. I am not very familiar with Elliott Waves but by guessing I would say waves are still not complete (still in 4), 5 down will reach the $32 area? Thank you for all the excellent guidance with detailed charts and comments you post on a daily basis.