See also previous blogs;
The week (not two) has gone by and now all the required subdivisions are there and similar patterns have shown up in other indices such as the Dow , albeit with different starting points. The peak is perfectly at the 61.8% retracement level of the entire “Great recession” drop and coincides with a first in financial alchemy, negative interest rates, introduced yesterday by whatever-it-takes Draghi .
The CAC40 is getting there, just a few more points and we will be at the upper trend line. A throw-over is always a possibility but with the proximity to the 61.8% retracement of the entire drop (see previous blogs) chances are that this trend will stop within the next week or two.
We did not think that BNS would trade beyond $61 for years but here we are close to $70. The precise EW count eludes us, we show two in the big chart, but there is also a third possibility with a large B-wave. For the moment we are more interested in the channel both big and small. For twenty five years this stock has meandered from the right bank to the left bank and back again, only once seriously leaping out of the channel. Again we hit the left bank and consequently we fully expect a return to the right bank and perhaps a lot more.
The chart is incomplete, that is we do not know what it would have looked like if it had come into existence years earlier. We are simple guessing that the $23 high was the end of a 5-wave sequence of some sort, but un till we get overlap ( below $16) the possibility still exists that we are in a wave 4. Even so the fact that we erase 62% in a few months what took a full year to build does suggest that there was a major top. The a-b-c back up may only be part of a more complex correction but it does look counter-trend so new lows should be forthcoming in the not too distant future.