I wanted to offer up a short idea in the form of Bank of Nova Scotia (symbol BNS). It is range-bound at the moment, and I’ve got my stop at 62.65:
Slope of Hope Blog Posts
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I think it’s worth noting the broad cycles that Morgan Stanley has had over many years. Below I’ve shown (with a bit of help from Mr. Roper) what the moving averages have illustrated about Morgan’s moves over the decades. To my eyes, it seems to have peaked, as it has twice before.
Wells Fargo is struggling to re-enter its long-term upward-trending Andrew’s Pitchfork channel, as shown on the following monthly chart of WFC.
The momentum indicator has fallen below the zero level on this timeframe and has formed a lower swing low…hinting of further weakness ahead. And, as I mentioned in this February post, major support is at 50.00, so a break and hold below would likely see price retest the October 2016 lows, or drop lower.
* UPDATE @ close…WFC continued its intraday drop and closed near its low of the day at 52.26. (more…)
Note from Tim on “Focus” Posts: this weekend I decided to do things a little differently, and share some charts that were in a related industry. I am short all of these positions shown.
The following Monthly chart of the Financial Sector (XLF) shows that it has been on a strong rally since mid-2017. It’s approaching major resistance around the 30.00-31.00 level (prior all-time high and double Fibonacci retracement levels).
With the Nasdaq continuing higher this past week, it has now reached our minimum target we were looking for before a pullback may be seen. But, I think the XLF may be providing us with certain clues about how 2018 may turn out. And, it may not be as rosy as many believe. Well, at least the first half of the year.
Anecdotal and other sentiment indications
Interest rates are rising. Tax obligations will likely be dropping. And, many believe this could be a wonderful environment for our banks to thrive. In fact, I am seeing many Wall Street analysts picking the banking sector as one of their favorites for 2018. Well, I certainly cannot concur, based upon what I am seeing in my charts, which provide insight into market sentiment.
As markets move higher and higher, for some reason, people turn more and more bullish. I mean, the drive that most consumers have to find the best price for the goods and services they desire is conspicuously absent from the greater investor community. (more…)