Wells Fargo (WFC) @ 18 month trough?


#1

Hello
WFC is looking very much like its making an 18 month trough…

The CML estimate appears very bullish for the next 6 months. This however is not very much in line with the Dow…

Note also that on the daily chart, WFC is about to produce a DeMark BUY 9-setup.

Anyone following WFC or other similar bank stocks ?

Regards,

Emanuel


#2

What data time frame did you use?

Best,

LB


#3

Hi man. This year ahead you gotta trade value. Low prices for buys only. The price is too high, buy low sell high. Better to put money near overpriced assets shorting. This and others is way too high. We are in a downtrend that could last 2 years. Best. Email me: derekwfrazier@gmail.com or go to my facebook group. Trading with market cycles.


#4

From 1990


#5

I apologize for a late response, but I was ‘blocked’ as I am a new user of the forum. I am ‘unblocked’ now…

I put together in a single image my 4 WFC analyses in order to explain myself.

I have a:

1- DEFAULT unpinned analysis: Hurst nominal model lengths
2- MY WFC unpinned: MY WFC model with lengths chosen by me as I see best fit
3- MY WFC pinned 18m early: MY WFC model with a pinned 18m trough at an early time
4- MY WFC pinned 18m late: MY WFC model with a 40wk trough pinned so as to force a late 18m trough

All analyses are bullish, as you can see from the CML (I use trough + peak) estimates. Some think a 20wk trough is in, others think a 40wk trough is in, and another thinks the 18m trough may be in.

Given the huge bearish market momentum, this is very counter trend. As was outlined by Derek Frazier.


#6

And to be complete I add a ‘less likely’ possibility I look at which is to have the last 54m trough pinned to OCT2014 instead of leaving it in OCT2016.

In this situation, Sentient is expecting a 54m trough at present time. Which could turn out to be a 9yr.

So, even more bullish, with the note that the precise 54m trough would still be in the next few weeks to come.


#7

Hi Emanuel, I dont believe that asset is worth the trade, possibly after the first 40 day cycle has completed after you think you have isolated the 80 week peak. I say that because it is just massively down at the moment. I cant see it recovering ayntime soon either. What other instruments or assets are you shorting this coming next few months? I was watching EURUSD today and it made a triple top, are you paying attention to that one? It looks bearish


#8

Hello Derek

I follow US equity, Euro equity, WTI, GOLD and yes, EURUSD. I have a particular interest
in the EURUSD as most of my investment capital is currently in USD, whereas my life is in EUR. So, I am
the equivalent of very short the EURUSD.

For the EURUSD, I have two views, depending on what peak level you consider the FEB2018 peak to be. Most of my analyses are seeing the FEB2018 as a very significant peak, perhaps even 9yr peak. But I have one other analysis where I don’t have the FEB2018 as a 9yr peak, but at most a 54m peak. This changes the CML estimate a fair bit.

To show you, I have 4 models with data from 1980:

1- DEFAULT unpinned : Hurst nominal model lengths
2- MY EURUSD unpinned : MY EURUSD model lengths as I see best fit
3- MY EURUSD pinned 18m trough : MY EURUSD model with a pinned 18m trough (as late as I could put it)
4- MY EURUSD alternative : MY EURUSD model without the FEB2018 peak as a 9yr peak (placed in MAY2014)

For the first three cases, Sentient is bearish till end of 2019. In roughly the same manner.
For the fourth case, Sentient is a bit bullish to MAR2019 and then relatively flat or down to end 2019.
All analyses agree that end 2019 / early 2020 be the start of a steep rise for the EURUSD.


#9

Hello

This week Sentient did one of those things I dislike. In WFC, in an unpinned analysis, it changed the location of a 54m trough from OCT2017 to OCT2013. That’s a big deal, and causes differences in CML estimates.

So, I decided to review all my cases and share them for a possible discussion.

I have my data from 1990 with:

1- DEFAULT unpinned model: Hurst nominal lengths
2- MY WFC model with 54m trough @ OCT2013
3- MY WFC model with 54m trough @ OCT2014
4- MY WFC model with 54m trough @ OCT2017

These are the graphs:




Comments:

1- The DEFAULT model is placing an 18yr trough in MAY2017, which seems to me to be completely off. Even so, Sentient thinks we are close to an 18m trough and the CML expects a ‘double bottom’, with troughs in JAN and MAR2019.

2- MY WFC model with the 54m trough @ OCT2013 is expecting an 18m trough, that is simultaneously a 54m and a 9yr trough. So, the CML is bullish from about now to JUN2019 (where an expected 18m peak lies). Note that Sentient places the 54m trough here (OCT2013) in the unpinned analysis.

3- MY WFC model with the 54m trough @ OCT2014 is expecting a very similar situation as for the previous model, with a possible 9yr trough in the making. CML with same bullish estimates. This means that if the 54m trough is either in OCT2013 or OCT2014 makes little difference to Sentient.

4- MY WFC model with the 54m trough @ OCT2017 is expecting currently a 20wk trough. CML estimates a rise till FEB2019.

I think I am covering about all ‘predictable’ cases. Comments welcome.

During the first semester of 2019 we shall see if Sentient is indeed right…


#10

Emanuel,

Love looking through your analysis. Seems like your bullish. What’s going to be your trigger to go long? How are you going to know if your analysis to go long is incorrect or not?

Best,

LB


#11

Hello Levy

I think it is too early to be outright bullish. Yesterday was, in my opinion, a short squeeze. Nevertheless some things bounced hard from trend line levels. That’s good.

WFC is at an interesting point, it could possibly be at a major turn. On the other hand, I read yesterday that WFC could also be making a large H&S, with price projected to the mid-30s. So, only time will tell.

I use DeMark for entry and exit, together with Sentient for direction. I think Sentient is also often good to estimate price projections, and thus to produce sensible exit levels. Sentient, by itself, is only a ‘guideline’ for future price estimation. This is my opinion…

About the correctness, one thing we cannot forget is that cycle analysis is a probabilistic thing. The analysis will sometimes work, other times it will not. Cycles change. I personally work hard to improve the reliability of my analyses, checking all reasonable configurations. I also think that other indicators which are ‘independent’ from Sentient should be used to improve odds of the investment.


#12

Yes, and now we need to get the otherside of the trap with a new low then consolodation inside day hahah. For a long.