Banking Sector: Part 2: JPMLast week we looked at the banks through the lens of relative strength ratios and the yield curve, concluded that all banks were weak, that regional banks are much weaker than the money center banks, and that banks at the index level had underperformed the SPX since the early 2000s. Prior to the events of the last few weeks, I believed that a significant credit contraction was already unfolding. Recent events have solidified that view. In my view we are early in a banking crisis, that will be centered in regional banking. I expect significant distress but have mixed feelings as to how this Fed will react.
The four largest US banks have 9.1 trillion in assets representing roughly 40% of all banking assets. All four are considered systemically important banks and can be considered the sector generals. This week we focus on JP Morgan.
JPM Monthly:
Much stronger volume in comparison to the recent past after breaking down from strong resistance suggests that the corrective behavior from the October 2022 (101) low to the most recent high is complete. The low volume on the rally coupled with the expansion of volume and a show of weakness suggests that a significant decline is likely unfolding. MACD oscillator failed to generate a buy signal and has turned lower again (see the notes in the triple screen paragraph).
Uptrend support at 104 is minor, I will be surprised if it is strong enough to contain the high volume thrust that is unfolding.
Lateral support at 101 and again at 77 are prime areas to monitor for bullish behaviors.
The 50% retracement of the entire bull market falls in the 88.00 area.
The potential for a head and shoulder top is very apparent in this perspective.
JPM Weekly:
Weekly: Making a high-volume show of weakness after testing the internal 141 resistance zone. The high volume coupled with recent closes near the lows of the weekly price spreads strongly suggests follow through.
The weekly MACD oscillator has rejoined the monthly oscillator (see triple screen below) on a sell signal.
First meaningful chart support cluster in the 101 zone (roughly 17% lower). The support confluence begins at roughly 106 and ends at roughly 95.00 with the lateral support from last Septembers lows (101) being by far the most consequential.
A significant violation of the 101 zone would strongly suggest that a systemic event was unfolding. A breakout would likely target the next major lateral support in the 77 zone.
Triple Screen:
JPM Triple Screen: Poor MACD momentum across all time perspectives. All perspectives are on sell signals. Note the fresh turn lower in the weekly. The monthly is interesting in that the faster average moved back (hooked higher) to test the slower average and then failed. I generally consider this a failed test (in momentum terms). The failed test makes the weekly sell signal more compelling. Note that the daily is a bit oversold, but with monthly and weekly turning over it isn't a major warning.
Fibonacci:
There are three relationships that interest me.
The first is the retracement of the entire bull market. The first leg lower found support in the 38% retracement zone. The 50% comes in around 87.00 and finally the 61.8% in the 67.85 zone.
The second is the retracement of the last bull thrust from 77.00 - 173.00.
The third is the Fibonacci extension of the 2021 high, to the most recent support and then extended from the last high. Equality (1) @ 107.00, 43.00 and 26.00.
Conclusion: Price action is extremely poor. Next zone to monitor for bullish behavior is around 101, but I suspect that much lower is likely. The caveat clearly is the Federal Reserve. If they decide conditions are dire and pivot to cutting rates and ending QT, this could change rapidly. Monitor credit spreads for distress. In the meantime, I will favor strategies that allow me to sell into hourly and daily perspective strength.
And finally, many of the topics and techniques discussed in this post are part of the CMT Associations Chartered Market Technician’s curriculum.
Good Trading:
Stewart Taylor, CMT
Chartered Market Technician
Taylor Financial Communications
Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
JPM trade ideas
JP Morgan looking for a bounce?Looking at the daily RSI bull div, it seems like JP Morgan might have a small bounce coming ~30 days. Looking at the probability based off of the past daily bull divs.
It could be that the market overreacted to banks collapsing and assuming the same would occur for JP Morgan, which could result in an appreciation soon.
A long worth taking with a tight stop loss, seeing as when these daily bull divs work out they barely see any downside after being indicated.
If short, worth taking caution. Seeing as the price is also already ~15% from the previous high. Though we must also keep in mind that a rising interest rate environment is not good for banks, and Jerome Powell is prioritizing bringing inflation down, meaning he is likely to keep hiking rates.
Share your thoughts below :)
Will tomorrow be the day $JPM drops to $71? I think it could >It sounds a little nuts, I know. But hear me out. We clearly have a double touch on the upper channel line on the 12 month- clear rejection. The 9 MA on the yearly looks awful too. General weakness, there and within the stoch rsi and mac d. The 3 month also looks awful. Let's hone in though on the 9 MA and 20 MA on the chart though- they're clearly about to fall through them. Oh, not to mention, the major obvious head & shoulders pattern. Everything looks horrible. Almost makes me wonder if the speech wasn't "awful" news today because tomorrow is the real drop, when everyone thinks the worst is out of the way... who knows? I just call the technical analysis like I see it. And based on the daily time frame anyway, I don't see anywhere else that JPM could LOGICALLY retrace to... so why would it? Time to drop :)
Banks crisisWith everything that's happening in the financial sector, and speculations about a recession. Just like previous prediction on Citigroup share price, JP Morgan is setup for a short after breaking below the major support and turning it into major resistance. I'm for share price to drop to the next major support @117.29
$JPM making me look bad!$JPM fell through that OG demand zone I had so now ofc it is a supply zone and resistance. If you look further back though we can make that new supply zone seen above.
We are at the 200-day moving average as well so good support there.
Again, that trendline I have is to be taken with a grain of salt. I think it is still being found and will be viable in the future.
I think the RR for $JPM is better from a fundamental standpoint than a price action one.
RectanglesPrice is hanging on the support line of the larger rectangle.
There is a smaller and larger rectangle in this chart.
It is hanging on, barely for now
Price is above the 50% retracement.
Earnings 4-14. I did not calculate upside targets but if this makes a miraculous recovery I will re-evaluate.
No recommendation
JPM short - megaphone pattern - target 118-120Financials are struggling a bit here for obvious reasons. I see a megaphone pattern appearing with likely target around 118-120 within a few weeks. A larger megaphone pattern also appearing with much lower target. Not sure if that will play out though. Best of luck to all.
repost for JPM PSA take that trend line with a big grain of salt, just an idea I see. Trends aren't two touch points, but all trends start with just two touch points.
I see a supply zone around where we bounced. I think better to look at it as a zone rather than blanket support.
Depending on time horizon you can see $200+ with JPM.
Some will see in the $130s, some in the $140s, some just want the dividend. All I know is it looks good and if you look close just finished a break down from a bear triangle.
Good luck :)
JP Morgan Bank will have a big crashJB Morgan Bank will collapse we are already at the beginning of a financial global crisis and it will be affect even on stock prices and we may see stocks fall by 90-95% of current prices. The gold is the only one safest in this next collapse. Even Bitcoin will not survive this collapse and will be pricely affected significantly and can see it on 1k or lower, so be careful and prepare new liquidity to enter
JPM good RR level$JPM around $127, $128 is a good longer term support level.
way back when it bounced to $144 afterwards. Bigger banks getting more deposits after midsize bank collapses
Mid size banks will be scrutinized harder so the bigger banks will have an advantage on the playing field
Cramer recommended it so I don’t really like it but I think I’m buying the dip he caused lmao. manage risk
BearishAnalyzed using VCP pattern. The market sentiment is bearish with and currently is in a downtrend. The indicators support this evidence. The increasing volume suggests that sellers are in the market.
Support is anticipated around 130'ish. I'm looking to see how price will behave around this area. Alternatively, if the trade moves against me I will be looking to get out a little after the peak of the previous pivot point.
Sidenote: This was analyzed on a 15m chart, though I mistakenly submitted on the 1H chart. 5m, 15m, 30m, 1H, and D charts were all used.