BBVA, Banco Bilbao Vizcaya Argentaria SA , belated update.

bbva dec 19 2012BBVA dec 21 2015

The usual then and now charts with three years in between, pretty much to the day. On a long drive recently I was listening to a radio programme that explained the 10 biggest mistakes investors just cannot stop making. Number 6 or 7, was selling your winners too soon, presumable with its counterpart of letting your losses run too long. I do not think this is necessarily a thinking error as it is more the result of your style, methodology or whatever you want to call it. It is not an error similar to Janet Yellen’s when she recently opined that the length of a bull market is not a factor in the chance of it ending. This is patent nonsense that can only come from someone who has been indoctrinated with random walk theories and does not realize that markets are very path-dependent and do not behave like dice.

     In the 2012 chart we recognized that the path for BBVA (and the IBEX , EWP and Santander) for the previous two or so years had been that of a diagonal triangle, in plain English a wedge. These wedges typically occur at termination points or where the market has gone too far too fast. As a result they usually reverse course and move right back to where they started, in this example about $14 on the ADR. We suggested getting out after a 25% gain, leaving about 75% on the table. This was no doubt too early, certainly with the benefit of hindsight, but it is not an error as such because it fits our “style”.  That is be nimble and move to where the action is (expected to be). The real question is what did you do next to deploy the money.

    Today we have no idea where this stock is going. Last time we were there Franco was still in charge. It will not be on our radar screen un till such time that the EW count is unequivocally clear, perhaps tomorrow, perhaps ten years from now.

BBVA, Banco Bilbao Vizcaya Argentaria update

The then (June) and now charts;

BBVA jul 25 2012bbva dec 19 2012

We advised getting out after the first 5 waves up, fully recognizing that the potential was much higher (see blog under SAN). Here we are doing just that as in the detailed picture below in dollars and Euros with different counts;

BBVA dec 19 2012 sbbva dec 19 s2 2012

As a minimum one would expect an a-b-c, but a better choice might be a whole new bull market. Now that Greece’s credit was recently upgraded, the unthinkable becomes possible or even plausible. Of course Elliott wave is essentially the art of not thinking! We did think and that is the problem. However if you the reader did not, and you are still in this, $14 is even a distinct possibility. Similar projections are possible with SAN and EWG.

SAN, BBVA and IBEX update

Please refer to the earlier blog of July 25th, 2012 and earlier entries for Santander etc. In it we warmly recommended the purchase of all three, SAN , BBVA and IBEX. Here is the IBEX for starters;

$ibex sept 2012

On that very day the IBEX actually traded just below the 6000 mark. Today it is at about 7500, up no less than 25%. Similar gains were had on SAN and BBVA (not shown). Even if the IBEX is not directly tradable the EWP could have been used, shown below;

ewp sept 2012

The gain here is about $6 on $20. We would sell all now in line with the adage, buy on rumour, sell on fact. In all cases either a wedge  or a simple 5 wave sequence for the last major leg can be counted. Also all seem to have completed, or nearly so, a minor 5 wave move from the lows. This could be an initial start to even higher levels but could also be a c wave ending an a-b-c rebound.

SAN , BBVA and the IBEX update

SAN Jul 25 2012BBVA jul 25 2012

IBEX jul 25 2012

Santander, Viscaya and the Madrid index are all at , close to, or even a little beyond what are “normal” reasonable targets under EW. The index could still do another 700 points or so to reach the 4th wave of previous degree but it has already lost precisely 62% of its value. Santander has maybe another 60 cents to go to get to the 02 lows, the 4th wave. Viscaya has done all that and is now pennies away from the trend line of the wedge wave c of C.

What one would expect in EW land is a turnaround somewhere here, if not for the IBEX as a whole then certainly for these two banks. To state the obvious , there is only another $4 left to the down side. Keep in mind also that Santander is the largest bank in the Eurozone and Viscaya is not that far behind. Both have extensive operations outside of Spain itself. If ever there were banks that fall into the “systemic”-risk category, it is these. Who knows, maybe just somehow they will pull another, bigger, rabbit out of the hat. If they are buys remains to be seen, time will tell etc. But in any event these banks are not good shorts.

Here they are in more detail:

san detail 2012bbva detail jul 2012

In the SAN case it is possible to draw the wedge less sharply which would change the count in such a way that we have only completed wave 3 and are now starting wave 4, that does not apply to BBVA at all. The RSI and MACD are not confirming the new lows.