The Canadian Technician

Lets Review the Canadian Banks

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Here is the Bank Sector:

$SPTFS Weekly

I don't like the red candle that made new 4 week lows this week. Here is the daily.

$SPTFS Daily

I am very surpirsed that the Canadian banks did not get a relief rally at all after the Monday / Tuesday drill down.  Maybe we tested the lows today and held. But with Wednesday, Thursday being so strong and no real rally on this chart, I am increasingly worried that the financial markets are sniffing more trouble.

Lets do a quick look of the weekly and the daily for the Canadian 5 banks.

BNS

The 4 weeks with closes all between $52 and $53 is very Bullish.

BNS Weekly

On the Daily, Look at these stretched candles.....

BNS Daily

The daily is really in a decision zone. The ROC is all around the zero line. The Price is still making lower highs, but just barely. You can see the candle length is starting to shorten so the buying is firming up in this stock. You'll notice on the weekly, how strong this chart is.

 

Here is BMO

BMO weekly


Last week it was looking pretty good. This week a red candle shows up. THis chart did not make 4 week lows.  Here is the Daily. Failed at the 200 DMA test, and failed support at the 50 DMA. TOUGH WEEK!

BMO Daily

These tight weeks are good, but its still not ticking up.

 

Here is CIBC.

CM

Here is the CIBC Daily.

CM

TD.TO

TD weekly

TD Daily.

TD

TD Is really weak here. Breaking down, 3 week lows, closing near the bottom.

Finally here is Royal Bank.

RY Weekly

 

Royal Bank Daily... This chart was annotated a few days prior to the following one.

RY

My current look at RY.TO is below. The weak chart above was annotated at the island high one week ago. It failed quickly. It dropped almost 10 % in a week even though major indexes were off only a little bit. So an Island reversal.

 

RY Update

In Summary, the banks are weak. I am not convinced that Greece is a sideshow, but it is relative to Italy. The  EU bond yields are creeping up to new highs after the efforts by the EU leaders to ring fence  Greece problems. One level that is closely watched is 7% for Italy. Currently the bonds are at 6.39% and when the announcement was launched we were under 6%. Another 2 weeks at this pace would put us over 7% .Not a prediction, just a place to get very defensive.

 If the Italian debt spirals out of control, they have 2.1 Trillion in debt. It is the third largest in the world! I am not predicting anything here, but why are these Canadian banks being avoided or sold? They are not world leaders but they are perceived to be relatively safe. To lose 8% this week after the EU rescue plan is worrying to me. Safe banks should show accumulation. I like the patterns in BNS. The rest not so much.

Europe also reported numbers that show the EU near or in recession.

If the banks can get a bid than I'll be more comforted. Can the $SPX get above the 200 DMA?

Stay tuned in.

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The Canadian Technician

Regards,

 

Greg Schnell, CMT

 

Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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