CBA TA update, page-398

For what it's worth I think we're in the C corrective leg down like what we're seeing in XJO as well. What I mean by that is the A leg down was all through 2021/22. But as CBA was so strong and in many respects benefited from the period it was choppy but held very well and did a sideways consolidation.

The rise from June 2022 to me does look impulsive (5 waves up) but these in practice can also be B waves corrective. And to add to CBA's strength the B wave even over shot and gave it a new ATH. That's the sort of set up that drags the last retail buyer in and sets up for the impulse C leg down now that we're seeing.





So who gives a toss, the QUESTION is where is it likely to land. A: first box around $85-$90 if we think this period of contraction will pass in a few weeks? or B more like $76-$85 if we think this banking issue in the US has a long tail risk. Trust me when I say I'm not trying to be bearish but if you think through the tail risk there's a small element of short term liquidity, the MBS holdings that will now mostly need to be sold down to return depositor funds and also the BAU eco stuff around employment not yet having rolled over in Aust.




So what about the other side to this argument, what can CB do atm? because that's really the only risk. Well, they really all want prices down and they for this period want unemployment up.

Expect to be surprised with the price action in the coming months as it won't be choppy as it was in 2021/22.

The question I'm asking myself atm is if CBA has reached a longer term top with the 3 wave phases I've marked in the boxes below. The clue was in the covid low when price not only reached the GFC high but also the 2010 top, more the 2010 top. When you get price action like that it signals that it's in the final wave of that move.

(It's interesting CBA behaved the same during the tech bust of 2000. Zoom in you can see it drop then take out the high and then roll over much deeper).




Why this is important is it gives you a frame work around where to start the fib retracement measure to get another perspective of where would be good to buy back in. So if it is a longer term top then you start at lows of 1992. But if it's just the wave V then you take it from the GFC low.

Like below for the first case.




Long post but pretty interesting.

MK.