The equivalent charts for the German EWG (see above blog) are;
The story is the same.
EWN. Double Dutch?
In the big picture the EWN ETF is very clear, the A-B-C B-wave retraces a predictable 62% after completing a nice wedge for C, here it is in more detail;
In the mean time we have managed to drop below the B-wave level and so far at least a case could be made that we are in a 4th wave;
The best fit here is to assume that we are in wave 4. The EWG, Germany is very similar. The tops is the top , no ambiguity, and no double Dutch at all. By the way, should wave 5 extend as is so often the case, it often travels about the same distance as waves 1 and 3 combined or about 8 points which would suggest 7.
MS, Morgan Stanley
One of the few left standing. It is smaller than GS but famous for it’s bond trading capabilities. It looks like it is a death spiral, just like Goldman, but the chart actually looks rather promising;
First of all, there appears to be a 5 wave down sequence as should be expected from all C waves. If it is or is not complete, is a different matter. The lows of March 2009 were at around $9 and so far we have gotten below $12 already. We know that at $10 or below there will be a lot of buyers so something is bound to happen around that level. The most interesting part is that the 5th wave of wave 5 seems to be developing as an expanding diagonal triangle, which , in English, is a wedge that has ever increasing swings in the 3 down legs and two up legs that it should have. It is an exhaustion pattern, meaning things have gone too far too fast. It only occurs as the last wave in a sequence and virtually always is retraced in full, in this case that equates to $18. Furthermore it does this fast!
The question that remains, is this wedge complete. The simple answer is maybe, maybe not. To play it safe lets assume it is not complete in which case one more dive to roughly $10 is still in the cards. If you buy it there you could make an 80% return in a matter of months. Use options if that fits better.
Below I have added the chart from July 2011 ;
At the time the stock had already dropped to around $20. It has gone further than expected but the pattern is still perfectly valid (as perhaps with GE)
PS. It could be that this stock goes to zero, but we would still have to get a wave 4 and then 5. This “wedge” would then be at the end of wave 3 as it has to be at the end of something. Given that wave 3 by that time will be from $30 to $10, a retracement to $18 would still occur as wave 4. So provided you sell at $18 things should work. If the stock does not get to $10 and rises from here, al you have lost is an opportunity.
NA, National Bank ; HCG, Home Capital Group
Both these banks are outside the mainstream, one because it is primarily Quebec based and therefore less Anglo so to speak and the other because it chooses to do what the others will not do, that is extend credit without a lien on the first born, mom & pops cosigning and a collateral coverage of at least 3x. Perhaps the resulting charts could better reveal where we are;
In the big picture National Bank probable topped at the first top, in purple. But even if it is the second top, in blue, one more down leg could still be in the cards. So far we still have a good way to go to reach the initial target of about $53 (the B-wave level within the larger B-wave).
Home Capital is behaving a little better in that it is already much closer to the first initial target of about $37. Also it has a far narrower channel adding credibility to the count. A single additional wave down could complete the first move, but this one could already be complete! If wave 3 (in blue) is shortend, waves 3 and 4 in blue would become 3 and 4 in purple and the first 5 down would be complete. All the other banks have equally mixed signals so buy only at the bottom if it occurs close to the b-wave level.