First recommended on April 14, sell 1.2 shares of RY @ $41 for a credit of $49.2 and buy CM at $51 for a debit of $51, all per share of course. Total outlay required $51000 for a 1000 share position. The short finances the long but margin is nevertheless required on both. Earlier I suggested that if this makes you nervous, to sell out the position at an about 2% gain. Today I would strongly recommend exiting the position as the CM is reaching its FIBO limit in the next few days. Right now you would lose  1200 x (44.60-41) or $4320 by buying back the RY short and  gaining  1000x (61.20-51) or $10.200, for a net gain of $5880 from the sale of CM, equal to an absolute gain of 11.53% in less than a month,all this without exposure to the banks.

Just a few days ago a spread trade was recommended selling 1.2 x RY at about $41 and buying CM at $51. The trade is essentially self financing so it can be done in a margin account, one side offsetting the other. Today RY is a little above $41 and CM at $53 plus for a net gain of, again roughly $2 which equates to about 4%. It may get much better than this but for anyone a little nervous on a directionally neutral position take your profit tomorrow and run.

Here is March 12.

As stated then we did not know if we would get 5 or 3 waves up, therefore at $35-$36 it was time to get out (rather many sure deals than a few bad ones). Now we know, it is 5-waves up which means that after an intermission ( b or 2) we should get another 5-waves to complete the move. This is what it might look like.

As it did follow the 5-wave track rather precisely I would now expect a pull back of about 61% to about $33 once it has reached about $42 /$44 or so. This is micro-managing the stocks future  and should be taken with a good doses of caution and lots of salt. Ultimately the stock could trade back up to $44/$48 which at the moment seems crazy but we should remember that most of  the negative stuff applicable to the US does not apply here. This is an oligopolistic backwater where banks are far less entrepreneurial,we do not have liar loans, mortgages without recourse and or the same degree of securitization. What we do have is the license to gouge provided by our central bank’s interest rate policy. Most other banks do not look as positive, in fact NA looks more like a 3-wave correction. It might also be a good trade to buy, say the Bank of Commerce and sell the Royal. Below is 2 –year chart.

Sell 1.2 shares of RY @ $41 for each share of CM  bought @ $51 and then wait.