When this stock approached $400 more than a year ago, we thought it was done. Recently it has gone a little higher ($380 or so) so that was a wrong call. But today we have a very nice diagonal or wedge. Invariable these are 5th waves that end a sequence of some degree. A drop from about here of about $100 is to be expected if this interpretation is correct.

    Blackrock is big! It has more assets, 3x as many, as the the Federal Reserve and equity to match. It is run by Larry Fink, one of the original bond traders from First Boston who has successfully transformed his career from a “big-swinging-dick”, to use bond trader parlance, to an , not all that old, eminence grise.  He has been a behind-the-scene power broker in just about every deal that took place in the last twenty years, including the bail-out. Now Trump has selected him as one of many members of his advisory council, together with Stephen Schwarzman as chair (CEO of Blackstone, the incubator of Blackrock).

    By conflating economic and political interest Trumps presidency becomes more dependent on the economic wellbeing of US industry and  Wall street. If BLK is a guide to what the future might hold things do not look that hot.

When all is said and done we expect this stock to trade at $100 (low of triangle) or lower, see previous blog. We think, that just like with the Shanghai index, we are in a 4th wave of 3, the rebound from today’s lows. However, as there are at least 3 1-2’s at the start we will need a similar number at the bottom and that would only complete wave A of a large a-b-c. Ergo do not buy this dip!!!!

Blackrock is one of the largest wealth management firms there is with nominal assets under management in the neighbourhood of 4 trillion or so. The EW labelling is pretty simple, there is either a large triangle wave 4 or a wave B. We prefer the first but point out that the consequences are the same for both. The thrust from the triangle fits the measure of it’s mouth, not precisely but close enough. The triangle might be one notch larger- wave 2 becomes wave e- and then it fits perfectly. The thrust itself (or c of B) is a clean 5 wave affaire and, so far at least, the move down from the top is impulsive.

Needless to say, the potential for much lower prices is excellent. If this would indeed occur with a company that is presently doing so well in the ETF space, it is worrisome indeed for the market as a whole.