GS is still in track from a month ago. It looks like we are either going to have a diagonal C wave , or a triangle B wave followed by a C wave. Both interpretations will be negated with a move above , give or take , $149

Then and now charts;

We had this as a buy at $90 for a target of $135. It did not get there (yet) so we changed the outlook to include a triangle and now are changing it back again to the original a-b-c. Also, instead of contemplating a simple 5-wave sequence for wave C, we now prefer the notion that this may be a diagonal unfolding. This would allow for overlap that occurs at about $129 if you assume wave one to be larger than shown in this chart.

The alternate possibility that contradicts most other information, is that this stock is in a new bull market and is presently in wave 3 up. Not very likely. By the way, this pattern is very similar to that of Manulife and Morgan Stanley. Considering that this company is the global finishing school for central bankers and other powerful players we suspect that it will do better than MLF and /or MS.

See our Sept, 2011 blog. We had recommended this stock at about $92 where it was down 58%. Obviously the expectation was that it might do 62% but the blog is pretty confusing on that account. Also a suggested stop-loss at about $90 did not make any sense. Any way the stock did rise about $40 but never quite made it to $135. Today we are changing the count as follows;

Waves 1 and 2 of C are not entirely clear, but the rest is. This too is a “flat” even if it looks a little tortured. The main idea is a large A-B-C that makes its low almost right away, the second low of the C wave is often not that much deeper. The thinking is that we are in the 4th wave, which may (or may not) develop as a triangle. Often minor 1 and 5 are equal, as 1 ,under one interpretation, runs from $195 to $130 or less, 5 could equal that which would take it down $65 to about $40.

Goldman Sachs has more fingers in more pies than any other financial institution. Half the worlds central bankers, IMF-ers etc . hail from or are at least on the GS rolodex. This company has perfected the art of gathering and using, without scruple ,any inside information they can get their hands on. All perfectly above board , of course.  No wonder they become the focal point of resentment etc. etc.

The stock has been hammered as a result. Do not be surprised if these guys go private once again and most certainly they will rid themselves of the constraining bank status, as soon as that is politically acceptable, probable now. In any case this one is down from the first peak of $190 and has traded with a $92 handle. That is down a clean $100., and , more appropriately in EW terms about 58% from the second top at $175. That should be enough to make people take notice. The wave count is, arguable, a clean 5 down with an extended third wave. By all reasonable accounts this stock should be a buy. The chart looks a lot like Manulife, but this is a different animal entirely! Use a stop, at say $90.

See also our earlier, very profitable , recommendations for this stock.