ER Surprise W Short term flat to bullish surprise er, maintains current wedge..break points 99.51-101.50 Trend Line watch.
Cibc
Gov't Bond Yields & Bank StocksFollowing government bond yields can be crucial to understanding the underlying price action of banks stocks. Take this example of Canadian bonds and stocks. We can clearly see how, following a steady expansion in yields of various maturities, a trend break where bonds suddenly appreciated (yields go down when bond prices go up) the results were a change in trend for the bank stock (in this case CIBC). The inversion of the 3 month and 10 month yields resulted in a trend change confirmation on the smaller timeframes. This is not just a coincidence: bank business models are heavily influenced by their central bank regulator.
CIBC | 40% Short Trade SetupConfirmation: 99.65 (weekly candle)
Invalidation: Local high
Type of Trade: Countercyclical (EMA50 above EMA200)
Target: 56.46
TF: Weekly
Leverage: 2x
Pattern: 1) monthly rising wedge reversal with 2) break of weekly support, and 3) break of major support line.
Monthly view:
CIBC Hitting Major Daily S/R LevelTaking a look at the daily chart CIBC TSX:CM to see that it could be at a very decisive point around the $104 area. Price hit a major horizontal that acted as a strong resistance turned strong support with price hitting that level on multiple occasions with subsequently massive price movement to follow.
* If price breaks this S/R level with conviction I will look to enter on a pullback to the S/R level
* If price bounces off this level this week I would cautiously enter a long position with a stop just below the S/R level
Considering the current market conditions and with this being the third retest of the S/R Level coupled with the 100EMA/200EMA bearish cross I'm inclined to favour the bearish scenario over the bullish in this case.
Trade Wisely,
Chloster
