ASX Shares A Closer Look at the Big 4

Few thoughts on where things are at with the big 4. With world indices still engaged in a bearish pattern, caution is needed for equities The big question is have recent falls been enough to price in the current problems banks are having? Hard to say but seeing the recent price action and position of world indices does not yet convince me these will turn higher for a new impulse wave set.

Some comparison shots of originally posted charts (15th Dec) with situation now...

ANZ 15DEC17


ANZ Now


December forecast gave preferred price zone of $26.09 / $26.37 and timing 2 Feb and 13 April (4 months in advance).

As it turned out there were 2 low points in the zone - $26.26 on 4 April and the actual low so far was $26.11 on 27 April. The interesting thing from here will be whether these lows hold longer term as I have other work suggesting equities may turn bearish.

ANZ has been the cleanest of the 4 banks in terms of pattern completion and perfection of the price & time reversal zone, the way the geometry rejected price is looking solid so far, however as we all know this could quickly change.

CBA 15DEC17


CBA Now


CBA has not shown a very good rejection of the price time zone is looking weak and is at a 'make or break' stage right now. If this area at $71 gives way it's another hint of trouble and the main impulse could turn down.

NAB 15DEC17


NAB Now


NAB rejected the first zone on 9 Feb (which was supposed to say $27.90 / $28 not $25.90 / $28). Actual low was $28.01

This produced a decent bounce but price has subsided again with a deep retracement to that bounce and similar to CBA is at a 'make or break' stage.

WBC 15DEC17


WBC Now


December forecast (level 1 of 2) $26.60 / $27.20 early April to Mid May with a specific timing line 27 April. Actual low so far is $27.60 on 27 April, price missed tagging the level by 40 cents but timing was exact.

The rejection looks a little more convincing like ANZ but as per previous comments, be cautious if equities turn down again.

No advice

 

Thank you. I love reading about the banks.

 

Thanks Alex
Any updates now that the Royal Commision has made some findings?

 

@therealAusting here's some updated charts my friend

Few observations...3 out of the 4 banks are very close to the retracement levels I first forecast 3 months ago (ANZ, WBC, NAB) but in general they have taken a little longer to reach there than the pattern would normally suggest. CBA has ventured a little lower and been the weaker member of the pack.

The fact the retracement patterns are taking longer than normally expected implies market weakness. The implication is that the current downward legs may not end as retracements, in fact due to the time for a retracement going 'past the norm' this is shifting the bias towards possibly a new downtrend but the market has not fully shown it's hand yet IMO.

ANZ for example is on the verge of taking out the low of the prior wave C which would invalidate the simple retracement pattern (ABC) and imply further weakness to come IF it happens. I much prefer to see 'standard pattern timing' to be confident about where the market is heading so it's very difficult to read at present which way things will play out next. All we know for sure is they are in a much cheaper zone now than they have been for quite some time

What I do know for sure is that a common theme is appearing at the moment: the weeks ending 29 June and 6 July have a strong timing cluster and look like they will be an important period to keep an eye on.

These harmonic timing points will 'add energy' to the market and most often cause a reversal and less often, it can cause a violent acceleration of the current trend (down in this case). If the retracement patterns do end up completing it will be obvious by the extreme volume of institutional buying that will kick in suddenly sending price action violently North if it happens. Massive volume spikes will give the game away if this happens.

ANZ

CBA

NAB

WBC


No advice

 

Thanks Alex,
So could go up or down as per usual.

I do wonder though how low they will go when the dividends are creeping up, NAB was listed at 7.63 pct on Google this morning. Is 8.00 possible without a GFC event? Let's see,,,, but if waiting to buy in I doubt it!

You see the end of financial year as the critical time.. that's interesting and something I go along with as well. My gut feeling is that we are in the middle of the worst right now (yep I put it in writing) due to housing going on the nose and the Royal Commission occurring right at the same time. A few months from now and a lot of it may be forgotten.

 

Thanks again Alex..
quote..
If the retracement patterns do end up completing it will be obvious by the extreme volume of institutional buying that will kick in suddenly sending price action violently North if it happens. Massive volume spikes will give the game away if this happens.

There were several large testosterone - charged buys for one of the Bank this afternoon and it may well be institutional buys-but as I have bought in 2 times now below the 69.00 dollar mark only time will tell as the orders settle tomorrow after 6..


The Fortune Teller (Caravaggio) - Wikipedia

 

Starting to see some better 'rejection' (as in price rejection) off the Dec forecast levels, pretty happy with how these 4 are shaping up for now but only time will tell if the fresh lows hold.

Sooooooo......if these lows do in fact hold (and patterns complete as expected) then we are just around the best of the opportunity. Disclosure: I purchased some holdings in these 4 recently.

This is a great example (so far) of why I love Elliott pattern and geometric TA methods. ANZ and NAB Dec forecast buy levels have been an exact hit, and WBC was accurate to within 4 cents.

Original Post Charts 15DEC17...

ANZ


CBA


NAB


WBC




This is the situation now...

ANZ


CBA


NAB


WBC


No Advice

 

Loaded up myself too! Silly me though didn't spread it across all four, got a bit carried away with cba.....must of been that Sh!tty little Dollarmite banks book they gave me when I was in primary school (I still have it). Still my favourite bank stock

 

Could just do the simple thing and buy Market Vectors Australian Banks ETF. Just under 80% by weight evenly spread across the big 4.

One to watch.

MVB - VanEck Vectors Australian Banks ETF | Australian Equities ETF | Holdings- VanEck Vectors Australia | VanEck Vectors Australia ETFs

 

MVB moving up

 

Quote..Bernard Shaw..
"The reasonable man adapts himself to the world --The unreasonable one persist in trying to adapt the world to himself..
Having "fun" Alex?..

 

@willair Fun...Yes sir!!! Some of my best work yet, hopefully you guys are benefitting ANZ is up around 10% off the low already, all others are up more than 5%

 

Looks like CBA is going well..

 

I think @Alex Straker mentioned it should tank again around Nov?

 

Would CBA be a good buy at 75$?

 

Just had a quick look at the long term share price of NAB. It looks like it hasn't done anything for many years, especially compared to CBA and WBC. What is the reason for this and why do you guys still find NAB attractive?

 

Uhmmm, no.

Hindsight you see. But with the RC and its effects the slump was obvious.
Now its a case of where is that bottom...?

Im ready with dry powder loaded.

 

Is it a good buy at $70?

 

Maybe.

 

I think sub $70 is good value, I wouldn't be going all in however sub 70 I'm happy to buy 20% more then I usually would