A member has requested that we examine $WFC. I have a good insight on this one that I would like to share, a lovely fractal.
For starters, let’s look locally. It’s clearly in accumulation or distribution. I have tried to arrive at a detailed count for this from the COVID crash lows on many occasions, and there are some specifics that I cannot quite solve with conviction, so I will ignore a refined count and just discuss this range. Now, this, much like the Russell (bank heavy) has traded sideways forever. But, unlike the Russell, this hasn’t fallen out of its range and remains above its 250-day EMA.
But, the failed breakout is a failed breakout. If it is re-accumulation, bear in mind that they often end with a “spring,” a drop that shakes out unwanted participants. We could be doing that now. So long as it remains in or above this range, it may move up and out of it again.
That said, I know this pattern. i’ve watched it develop before, and I will show it to you on the next chart.
This weekly view will show you the amazing rhyme. You like that? Interesting, no? So, crash, liquidity event, brrrrr, banks are happy again for a while.
Bear in mind the sheer scale of the last one. For all we know, this may still—like the last one—have another year of sideways chop given its place in the fractal. We may move up, then down, then get going. Who knows, but bear that in mind.
And finally, despite the fact that I cannot find a reliable count locally for this stock, the long-term chart looks like a clear nest of ones and twos. Neither the GFC, nor the COVID crash look like feasible “fours,” as they were both 78.6% retracements of their prior advances, and so they all look like “twos.” If that’s so, then this may have untold years of “up and to the right” ahead of it to come, decades and decades, really, so I have no concerns about this from a long-term perspective.