Hamilton's E-Wave Analysis

DB, Deutsche Bank update

The usual then, Feb. 8th, of this year and now charts;

At the time we mentioned that it still had a long way to go. It did, about 50% down again. However it seems to be following the anticipated script which is a double zig-zag or a-b- X a-b-c. Often the legs are vector equal and in this case they almost are.

The bank was very vocal about how misguided the Fed. was with its low interest rate policy and, not surprisingly, the stock starts to rise almost in perfect tandem with the US rates, having gone up nearly 100% from the recent lows of about $11+.

This bank has derivatives on its books to the tune of 20X Germany’s GDP. If there ever was a bank “too big to fail” this is it. What that means , by the way, is that it wont fail. That does not mean that it cannot stay down for a long time, see for instance RBS, Royal Bank of Scotland, but it does mean that the future performance is going to be asymmetric.

Short term it should trade up to about $21, the top level of a triangle. Then it will probable fall back $5 or so as it is presently a little overbought, but after that it could easily go to $30-$45.