Another look at the banks can be informative. First I have made it rather well known that I was VERY bearish on the banks, way too early perhaps as I have held this view for at least 3 years now, if not longer. Here is why;
First of all the stock is up in (arguable) 5-waves, increasing the tangent with each new leg up suggesting a bubble of sorts that would require a large correction any time. Normally to the 4th wave of previous degree that could be at $23 to $14. This move, as with all the banks does not correlate to the growth in population or any other metric that would justify it. Also it far exceeds all the “other†stocks as shown in the lower chart overlaying the TSX, which itself did pretty well but was outperformed by about 1500% from the base in ‘74.
Looking at BMO things are a little clearer as the position of the 4th wave is less ambiguous.
