JPM update

jpm jan 2 2016 1jpm jan 2 2016 2

This blog is along the same lines as the one done on Royal Bank about a week ago. There we showed 3 possible counts and expressed our preference for the one with the triangle in the 4th wave. Here that is shown on the right in blue.  Unlike with RY the count using the smaller triangle in the B-wave position (the one on the left) is by far the most probable. Not only is it the most elegant but it also avoids some overlap problems and it is the best proportioned.

This is either the largest, or the second largest bank holding company in the US (after WFC?). It is a collection of banks we used to know as free standing entities, such as Manufacturers-Hannover, Chemical Bank, Chase Manhatten, Washington Mutual and Bear Stearns.  They are the largest derivative traders on earth and this is area where things can go wrong pretty fast. To get a taste of that we suggest you read http://media.bloomberg.com/bb/avfile/rJ5Q_k_NsIk8   which is a report on the uses and abuses surrounding derivatives at the time of Ina Drew and how 6 bln. was lost. Ina Drew was the trader from Chemical Bank (also my alma mater) who became head of Morgan’s  Synthetic Credit Portfolio, the famous “tempest in a teapot”.

The unavoidable conclusion must be that it is not smart to stay with this stock, or GS, MS, WFC and quite a few others.