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Tuesday, May 2, 2023

Additional Fallout from the Most Recent Bank Failure - First Republic - + Candlestick Analysis

 Dull markets continue, so I had planned to blog on something different today - candlestick analysis - and we'll get to that in a moment, but first: 

Additional fallout from the recent bank failures

Certain democrats - and I suspect independent's, and fiscal conservatives as well... - are furious over the latest tax payer funded, Wall Street bailout, of yet another failed financial institution, so you can bet we're going to see a backlash in the form of over-regulations, as I eluded to in yesterday's update.   

Warren Says First Republic Bank Collapse Exposes the Rigged US Financial System truthout.org

Needless to say, I don't agree with Senator Warren on much, but I think everyone should be outraged at the state of the rigged financial system. This has gone on for way too long! 

Another point on these repeated bank failures. 

Three bank failures in a row, is bound to leave a bad taste in investors mouths. That means that there may not be a bid underneath the market, the next time one of these zombie financial institution fails. We've already seen the Saudis take a pass, and money flow into every other market, in an accelerated form of what I like to call Whac-A-Mole investing. That's the idea that, "we don't need a healthy banking system, "banks aren't that important anymore", all we need is big tech to lead the market.     


I can remember a time - not too long ago - when the big banks lead the market. Names like Citigroup, Bank of America, and $JPM.  

And that's a nice setup for the first chart of the day: 

$JPM - 1. See the volume spike two weeks ago. 2. see the gap above the 50 day moving average (classic). 3. Also see the abandoned baby candlestick, because that's the next topic I want to touch on.  


I'm going to suggest that JP Morgan was set to take over First Republic Bank 2 weeks ago! 

Seems obvious to me, that someone knew JP Morgan was going to benefit from the recent bank failures, and I predicted this from the start. 

I wouldn't be surprised if their very own hedge funds were the ones hammering $FRC stock, down to  0%. 

The highly suspicious (a little too orderly) selling of First Republic Bank Stock


 

I did dip my toe, only to have it chopped off. 

I figured they couldn't possibly allow a 3rd bank to fail. I was wrong. 

Of course Friday's engineered take-down, which was followed by a perfectly timed press release....

 JP Morgan picked up $FRC for an undisclosed (bargain basement) price. 

 The End


Candlestick Analysis 

In this week's Newsletter I included some candlestick analysis on the $SPX, and then Monday I recognized a well known candlestick pattern on the $META chart. 

 

Tri Star Pattern    

Basics of a Tri-Star Pattern and How to Successfully Trade It from Investopedia 

$META - This was looking like a perfect tri-star reversal pattern, when I started this update, Monday afternoon, but by yesterday close the third candle in the series, looked more like a spinning top.... 
Candlestick analysis is subjective; like I said in this week's newsletter, "it's more of an art", than a science, so I'm going to call it a bearish tri-star pattern. 

I overheard Joe Terranova on Fast Money, on Monday's midday show, claiming that he just went long Meta, all I could do was shake my head. 

More Charts Being added to the Public Charts Area 

Yesterday, I mentioned a gold mining stock Anglo American ($AAL.L). I later realized that most trader's who follow this blog probably can't even afford 1 share  of AAL trading @ $2450. It also trades on a foreign (in this case London) exchange, which may present a problem, but I only offer this analysis as a learning tool.   

Yesterday, I  talked about putting a tab on the home page for a basket of stocks, but I then I'd have to keep that updated... and that just becomes a distraction I don't need. I'm much too busy charting the next crash target on the major indices to be bothered with a Jim Cramer style basket of stocks, but I digress.   

Instead of adding a page tab... I'm just going to start adding some stock charts to the public charts area. These are stocks I don't personally own, but that could change in the future. 

Adding names I've recently mentioned: 

$VNO Vornado Realty, Tesla $TSLA, $SNAP, Anglo American, and $META

Lets add a Regional bank

$WSBC  WesBanco Inc  - sounds Spanish right? No, Virginia, actually... 


I'll also add $JPM, since the entire US banking system seems to hinge on this one name! lol 

There's a link to the public charts area, in the side menu 

As far as the broader market it concerned, watch Germany


Take Care,

AA 


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