...this morning CBA made a low of $147.22, and is down >-3% as I write this.
...my prior warnings on CBA is materialising and its uptrend trajectory line clearly broken to the downside. And this is despite major shorts have covered their positions early on too prematurely. Perhaps they have gotten onboard again.
...On two separate occasions below, I indicated the end of the bank rally is nigh; the banks have or approaching correction territory.
...CBA could be testing $150-151 on Monday to the downside, once breach $142 is where it is likely to head.
...what goes up a lot tends to come down very quickly, quicker than you'd expect.
...I have cautioned on many things before, it turned out to be right:
> Oil and coal stock exuberance rally in 2022 would not last
> $50 BHP peak
> Lithium stocks facing protracted winter hibernation
> Gold stocks are not Gold, they have underperformed
Now bank stocks are heading south, not good news for ASX in the absence of any surprising China bazooka stimulus that would wake the resource stock sector out of its slumber.
Jamie Dimon's 1/3 disposal of his holdings in JP Morgan is as good a clue as you can get from a key bank insider as to what is to come for the banking sector ahead.
HEED THE CAUTION. DYOR>
I posted on 29 Dec 2024: CBA closed at $156.21
...given the many under-the-hood problems that banks face, it has been amazing that banks led value stocks to beat the major indices in 2024, and we saw that with CBA locally
...but all that is about to end soon. Which spells trouble for ASX.
...banks have been well loved, XLF up +32% the past year while S&P500 did just +22.5% and even Nasdaq +25.3%.
...internationally, banks have been the outperformer and consistently at that.
...but I think that 'love' is misplaced, because the market is shrugging the hidden risks of their CRE assets and precious metals derivative exposures. And rates are dropping and delinquencies rising.
...your dividends however good they are, will be offset by the capital gains you are about to surrender in due time. It is so easy for people to forget that CBA did nothing between March 2015 to April 2021, a good 6 years of sideways movement, after that doubling run-up from Sept 2011 to March 2015. The stock has gone 2.5x up since Sept 2020. Almost identical.
...I may be several months ahead, as usual, but I have been usually right (you just don't want to hear it when it is inconvenient).
Warren Buffet continues to DUMP stakes in US's biggest banks: Berkshire Hathaway sold 40.6 million shares of Citigroup worth more than $2.4 billion or almost 75% of its position in Q4 2024. The firm also sold 95 million of Bank of America's shares reducing its stake to 8.9%.
