As per today’s high the correction is perfectly symmetric, the C leg is vector equal to the A leg. It is also a mere 40 points below the April highs.  Both the MACD and RSI seem to be topping .For the immediate bear scenario it cannot really go any higher. Should it do so, then I would suggest the wedge is operative and the top should then be formed a little higher but under 12500.

To elaborate on the previous blog;  the big pause in Citybank may have been a 2 year triangle, in the case of the TSE it may be a simple A-B-C as in the blue or red labelling. The May, June and July drop was most certainly not a text book 5-wave and could have been a C wave in its entirety or a whole correction. If that were the case then we should now be looking at a wedge up, specifically we are in wave 4 of the wedge. Under this scenario a new high might be possible above the old one of 12321 but probable no higher than 12500.

I do not give much credit to this scenario but mention it only to point out that even if a new high is made, the next stop is not necessarily the moon. This scenario, by the way, does not fit the US markets and many others.

Top chart is that of Citybank or group ,or FNCB for the old folks. The chart covers the period from ‘01 to ‘07 and therefore is not current. This particular period coincides with the peak influence of Sandy Weill and the early stages of Rubin etc.etc. It had occurred to me that the stock was ripe for a  tremendous drop, given the grotesque mismatch of the different parts, the lack of synergies and the rather obvious internally dysfunctional management style.

I believe it was Keynes who once said that markets can stay irrational longer than you can stay solvent . It is very stressful when markets do not do what you expect, especially if you feel there are fundamental arguments in favour of your view. But markets are there to suck in as many as possible and usually they do a good job.  Now looking at these charts that have different time-frames , it is clear that from the lows the initial rebound is very strong, in the case of C taking about a year and a half, and in the case of the TSE 8 months. C then stays up there for another 2 1/2 + years without breaking down. Using the same proportions that would equate to roughly 13 months for the TSE. 12 months at least have already passed.

Click on the charts and move them around.  Citybank, of course, drops from $50 to $1 or something like that in the next 3 years, see chart below.

Using the same approach as with the World, the 62% retracement was at about 12206. We tried to get to that level a few times, even exceeding it for a brief moment and about 100 points. Just a few weeks ago we were actually below the levels achieved late September, exactly a year ago. Very frustrating for both bulls and bears, but nothing here to get bullish.