See Wells Fargo as a comparison to JPM. They are the same.
JPM
JPM update
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 an 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.
JPM and WFC
We recently looked at JPM and pointed out the two possibilities in the count repeated here;
Quite clearly there is a triangle here, either as a b in a B-wave or, if drawn much larger (not shown) as a wave 4 in the entire sequence. The “channel” is hard to determine but must run something like shown by the light grey lines. Presently we are outside and above that channel. Also we are beyond the apex in terms of time and both the a and c legs of the B-wave are equal in magnitude if not as vectors. Wells Fargo, now the largest bank in the US is at a similar though different extreme point;
Both counts could apply to WFC as well, however, as it lacks the triangle right in the middle the B-wave is a little more tentative. The channel, on the other hand , is more pronounced and again we are above it. Both look well done to me and, granted that does not mean that these stocks have to turn on a dime the next few days, they are sells nevertheless.
Banks are reporting again this week and considering we have had 26 such occasions since the lows they usually pass uneventfully. This time could be different. Remember also that both these stocks have added almost as much or more value in the past four years or so than over their entire existence prior to that.