Every quarter Canadians wait breathlessly for another round of “earnings season” for the banks and , in a broader sense, the financials. Every miniscule move, up or down , is met with a barrage of analysis that is essentially a waste of time as the banks will always be able to extract what is needed to continue to perform. The only exception is when they are blind sighted and do not see “IT” coming. The next such event, they come up like clockwork every so many years, should be just around the corner. We use the XFN as it provides a nice cross section of the industry (but RY or BNS are pretty well identical);
In the big picture we are still looking for a very large A-B-C and are constantly amazed how high the counter trends manage to take it back up. But the pattern is sufficiently clear (so clear that we anticipated a few of these moves!). It is a series of 1-2’s and given the action in the RSI and MACD wave 3 down could start literally any moment now. Of course we have no idea what “it” might be this time but it would not be all that hard to point to certain developments that could upset the apple cart seriously.